"Let's dig for my dead brother"

My just turned 7 year old daughter has made up a story that her then 2 year old brother was kidnapped by a skeleton in a haunted house during a trick-or-treating.  She convinced 6 of her classmates (all girls) to come and dig near their school to find her lost brother.  I found out about this through a classmate's mother over the phone.  My daughter has been warned by the teacher not to tell such story again.  Today, when I asked her why she did it, she said it's because she wanted to get attention - someone to play with.  She said (being the youngest in her class), the older kids often made rules to suit themselves and would ignore her.  She's easily intimidated and timid about physical activities.  She said she thought this sad story would help get some friends to play with.  What do I do or say to her?  How can she overcome her timid nature and play with (and face up to) the older kids in her class?  Please help!

[cbs62]

  I bet her response to why she did it broke your heart.  But she is extremely creative isn't she?  I would talk to the teacher who may encourage others to include her.

[SeriousSam]

Your daughter and son are otherwise fine yes?  Help her draw and write books.  right now they will mainly be picture books but she will develop skills, she can enter them in contests etc.  Maybe if your in a more rural area you might want to try 4H.  They have very good art and writing modules etc.