I do agree with not sending her to school - it would definitely be trauma.
On your question: " Do I sit next to her and do everything with her all day?? Or let her do less work/no work?" When our son dropped violin lessons, schoolwork (like MomWithOCDSon, he kept erasing until there were holes in the paper), stopped going outside, there was no way he would have been able to tolerate sitting next to him and doing everything with him all day. Doing less work (and modified work), and sometimes no work, was all he could handle. On the "is this behavioral, or the disorder" question: it seems everyone with this disorder struggles with this question. There is a sense in which, of course, everything is behavioral because it is all expressed as behavior. The disorder is inextricably tied up with feelings, wants, needs, emotions. After seeing my really good kid regress so suddenly and so deeply, I could not blame his intent as if he was choosing to be stubborn. I really do feel that cutting the child some slack, and erring on the side of "its the disorder" is the appropriate way to go. They can't help it.