aeg,
There is something "underneath" what you are asking that is not clear to me. Not that you're not communicating clearly, but that I have some sense that I am not totally tracking with what you are asking. Let me try to explain my understanding of quotation marks ("quote marks" is not quite correct") and quotes. If this still does not totally address your concerns, please do not give up on us, but keep at it until we understand your concern and can address it adequately.
The first difference is fiction and non-fiction.
Non-fiction has to be accurate and only quote what factually qualifies for quotation... that is quotes of what other people said or wrote.
Fiction, including what the kids write in CW Aesop and CW Homer, gives the author license to invent dialog as he sees fit. (I will come back to this).
If you are purporting to write an objective piece of research/non-fiction about what someone said, you MAY interpret and paraphrase that person, but you may not put what you think he said in quotation marks unless you can quote him directly (from your own personal interview writing down what he said, or from some other reliable source... in print, tape recorder, video clip, etc). SO, there is NO freedom of interpretation when you are purporting to be factual.
This would include my quoting something David Copperfield said in Charles Dlcken's book of the same name. If I cannot remember precisely what David said (or am unable to look it up) I must refer to it indirectly, like:
David Copperfield when talking to Agnes professed his undying love for her.
Now, when kids in CW Aesop and CW Homer rewrite narratives, we make it clear from the start that they are doing their own retelling of the work. For example, when my son retells the Hare and the Tortoise, I have him write as title and author:
The Hare and the Tortoise
Retold by Alex Jaqua
IN THAT CASE, he can do anything he wants to the story. He can make up what the tortoise said in great elaborate detail, INCLUDING stuff that Aesop never had his tortoise say at all. Anything that the tortoise says in Alex's retelling would go in quotation marks if it is DIRECT speech... defined as
The Tortoise, who was tired of the Hare's bragging said, "You are so full of hot air. Just to get you off my back, I will race you, and see if I don't win!!"
You would use indirect quotation if it were reported like this:
The Tortoise, sick of the Hare's bragging, informed him that he would be glad to race any day, and that he, in fact, intended to win the race.
The aim in CW Aesop and CW Homer is to teach the students to write stories. They start by writing stories that are imitations and paraphrases of stories they have read, simply because imitation is the first step in learning a new art. Later, they can change those stories, invent their own characters, invent their own speeches and mannerisms from those characters and ultimately also invent their own conflict, morals, plots, etc to write their very own narratives. BUT in the beginning, they imitate as they learn how to tell a narrative in sequence. IN THE PROCESS of that beginning imitation in Aesop, IF they have the imagination to invent their own dialog, that is, make their characters say things that are life-like and that fit the story, they may do so.
The aim with CW Aesop is not to reproduce the original in exact wording or exact details of the narrative, the point is for the student to grasp the essence of the story: the character, their virtues and vices; the plot, its conflict and climax; and the moral, its application in this case.
Does that make things more clear?
The rules for using quotation marks is the same that it would be anywhere in any fiction book... that is, WE at CW picked the MLA convention and are using it. Other authors will use different conventions (especially older works will use different quotation punctuation for dialogue).
Lene