General help

There's no concept of a 'School' in Moodle, nor is there true 'multi tenancy' but I don't think you need to go that far.

To address the easy problem first, by default (I think I'm correct) students only see their classmates in the courses thay are in.

The other, there will be several ways. I would use Course Categories to separate the schools. You can then assign Managers to the Course categories to have control over their own schools. What you cannot do is to allow them to add/delete users for their own schools as that is currently a site activity (you need to be an administrator). You can create new roles with limited rights to assign at the site level (e.g. only create new users). You should probably read/understand course categories and a bit more about how roles and capabilties work

Others may have better/different ideas.

If I understand, you want one course that has students from several schools, but you don't want the teachers or students to know anything about the other students or their schools.

If this is what you want, then it seems that you will not be having any "join" activities, such as forum discussions.

At first, I thought that you might use "groups," but some of the management of groups might be more than you will be able to tackle until you are much more familiar with Moodle. However, you should still explore groups.

Next, I wonder why you don't create a course for each school? This might make your "privacy" issues easier to manage. Moodle does offer the concept of a "master" course and "slave" courses, but I don't use this feature and this is about all that I can say.

Last, I am sure that you have reasons, but what's the big issue of having students know who all their coursemates are?

So, the answer to your question is that Moodle can serve your needs, you just have to decide how and where you want to invest your time into moodle, course, and student management.

Let's take a concrete example to further explain the situation.

Let's say there are 2 schools, S1 and S2.

And 4 students, 2 from each school. A1,A2 of S1; and B1, B2 of S2.

And only 1 course, say C1.

What we desire it that school S1 and S2 each get some sort of login which allows them to see progress of their own students but not other school's students. In this case, S1 should be able to see only A1 and A2. S2 should be able to see only B1 and B2.

All 4 students have student user and taking same course C1. But again, A1 should be able to see only A2 and not B1, B2. Similarly any Bx should be able to see only other Bx.