Can different grade levels use different grading scales?

Yes, at the assessment level, different grading scales can be applied to students of differing grades. This is done on an assessment-by-assessment basis, so it's not possible to have multiple grading scales apply to a single assessment. It's easiest if student sections are organized by grade, but it's also possible to hand-pick students on an assessment.

When you create an assessment, you can click the "Additional Options" section to choose a grading scale other than the default set for the course/school. If you have a math course at your school that is attended by both 5th and 6th graders, you can specify separate grading scales for each group of students by creating one assessment for the 5th graders and another for the 6th graders. 

This is easiest if students are grouped in sections according to their grade. In this case, create an assessment that only includes 5th grade sections and then choose the appropriate grading scale set from the "Additional Options" menu. Then, create another assessment (this can be done quickly by using the assessment definition of the first assessment) for the 6th graders that includes only 6th grade sections.

If students of different grade levels are mixed up in the same sections, you can hand choose the students that appear on a given assessment. Make sure that no sections are selected in the "Sections" menu, click into the "Input" tab, and use the "Add Student" button to add students individually.

As an alternative to hand-picking students, you could create an assessment with everyone on it, log results for just students in a particular grade, and make sure that all other students are marked as excused/inactive. On the Add Assessment page, this is done by X'ing out students who shouldn't be on the assessment, and in Gradebook this is done by leaving cells blank for any student that shouldn't be on the assessment. Note that all assessments created in Gradebook use the course's default grading scale, and this can only be changed on the full assessment details page.

Finally, it's important to remember that this differentiation is only possible on the assessment level. All course grades will be calculated based off the course's grading scale.