Congratulations on being the mother of two schoolgirls! Pre-K and First Grade: very impressive.
I've been thinking about your question of what to read next, now that both girls are enjoying Mrs. Piggle-Wiggle. What books might entice Isabel to enjoy longer narratives?
At first, I came up with some chapter books that are camouflaged to look like picture books. The Santore versions of The Wizard of Oz and Snow White fit that category. Penguin books has done paperback editions of Fantastic Mr. Fox, Charlie and the Chocolate Factory and James and the Giant Peach in an 8" x 10" format with color illustrations (still the great Quentin Blake pictures) on every page. Running Press has large retold versions of Peter Pan, Brer Rabbit and Aesop's Fables with a full page picture on every two-page spread. These are all called "read-aloud versions," designed to bridge the transition from picture to chapter books.
Then I came home to dinner with Bob, and we got to talking about Mrs. Piggle-Wiggle. What Mrs. Piggle-Wiggle has that these others don't are real kids, in (more or less) real situations. The conflict level is pretty high, intensifying the emotional drama. She may not be old enough for them yet, but I think Isabel may find the Ramona books very much to her liking: a younger sister struggling with the world's expectations of her. Henry Huggins, also by Beverly Cleary, combines some of that real-feeling atmosphere with the discovery and adoption of a stray dog, which could appeal to Isabel.
Another one that might be worth looking at is the Stink series, by Megan McDonald. I hesitate to recommend it because I only skimmed through the first one years ago. Stink is a spin-off: he's the kid brother of Judy Moody, who has her own ten book series. She's a fairly overbearing big sister. In the first book, Stink: The Incredible Shrinking Kid, he finds ways to stop worrying about his height (short), and tries to handle a certain level of conflict with his big sister. It might be worth you taking a look at it before you introduce it in your home. What made me think of it is the level of emotional intensity.
Will keep thinking about this. More domestic drama -- hmm.