ISI FS5 is in no way equivalent to USFS FS5. They are completely different systems and do not track together. USFS freeskate levels are still considered basic skills, and to compete in those competitions you generally cannot have passed any official usfs tests, including moves. Skaters who skate both levels and skate ISI FS5 are generally at least pre-pre or preliminary in the USFS system. The USFS levels are "easier" because USFS wants to get kids into their eligible skating system (the "real" tests), for ISI, these tests are the real tests.
Your daughter can only compete in ISI competitions if she has completed and registered ISI tests. She will test up to the level her coach/skate director feels appropriate, and compete there, her USFS class will have no bearing on this.
If she is in a USFS Basic skills freestyle competition, she will only be competiting against kids in the USFS level. If those kids also skate ISI, my guess is they would be closer to ISI FS3 for USFS FS5.
I don't think they are learning MORE in ISI, just that they are learning different things.