I don't see how the situation is much different if we're talking about a Jewish, Hindu, Muslim, Athiest, etc, child. A Pagan child may or may not face similar issues in a school like this, as some Christian symbols are Pagan symbols as well.
Yes, some families who aren't Christian enjoy celebrating Christmas as a cultural holiday- and there's nothing wrong with that. But children who don't celebrate Christmas shouldn't be made to feel uncomfortable because of that.
IMO, the decorated evergreens, reindeer, and pictures of a guy with a white beard and mustache in the red and white suit are acceptable. Yes, they're all symbols of Christmas but there's nothing overtly religious about any of them. Any child can walk past those decorations (or even participate in making them) and walk away feeling OK about the holiday season and their friend's celebrations, even if they don't celebrate it themselves. It's certainly not ideal, and it's one of the reasons I'm not comfortable using public schools personally, but it's acceptable for the schools to do.
As for the "winter concert" songs- were they religious songs talking about Jesus' birth, or just general celebration type songs about enjoying the holiday? I'd have a big problem with my Jewish kids singing "Silent Night." I don't have a problem with Jingle Bells, Walking in a Winter Wonderland, or even Rudolph the Reindeer. Yes, it mentions Christmas and Santa but not in a religious way.
A man dressed in a Santa suit, asking everybody what they want for Christmas, is over the line. That's making the assumption that every student celebrates Christmas at home and that the celebration includes gifts.
Plus, as others have mentioned, the bullying needs to be addressed regardless of the focus of the bullying.