Katie,
1.- Thanks for your message. I couldn't have guessed that that was the problem.
2.- I wonder why a teacher would ever set "Show gradebook to students" to No inside a moodle course. And please note that this is not the Default setting.
3.- However, even if "Show gradebook to students" is set to No for a moodle course, there is no reason why this should prevent the Link to Activity from being displayed. I will look into the matter and post a bug report.
Joseph