Club dancers are sometimes very rhythmical with nice body action. What is missing are the partnering skills that allow them to dance with the good dancers. Also we have standardized names for the skills, elements and patterns. In level 2 we don't teach those things, we just say the name and expect you do what we request. Having the terminology makes everything quicker and easier.
Every school has a different system for determining the levels of the students and classes.
One school's level 4 may be equal to another school's level 3 or a third schools level 2. A safe bet is always drop down a level AND to also take the beginners class. Understanding the foundations that the teacher is building upon is crucial to getting the most out of a class. The class you have been promoted to AND the Level one class. All advanced athletes and artists always spend time working on the basic skills of their trade.