As a teacher, I think you should have a heart to heart with your daughter about how you feel, but most importantly, how she feels. Let her be honest. Also, remind her that the boy is only 5, and lacks the developmental "tact""that she has at 7. 5 year olds hear a lot not only from family, but classmates, TV, etc., and they just let it all hang out!
Don't feel bad for feeling bad at the moment, it's a sensitive topic.
I now teach high school, and a 15 year old who loves to hug me said, "no disrespect, but I would hate if you lost weight because you are so...fluffy! It makes you huggable!"
Fluffy, he says. The 5 years olds used to just say I was fat. I kind of like fluffy.