You have a good idea cooking here, and, as always, your prose is strong. Where you stumble is in misjudging the nature of your content. You're trying to shove 10 lbs. of story into a 2 lb. sack, and the result is at first confusing, then unsatisfying.

The natural arc you're tapping into is the steady metamorphosis of a shy, normal child into a monster. Great. Love it. Truth is, there are no elements here that should not be there, and, more or less, in the way you've presented them. But the time frame is ridiculously compressed, such that when you spring the surprise on the reader, they've had no opportunity to follow the normal trajectory a confrontation with horror would demand. Your reader will go, "HUH? Oh... okay..." This story has a lot more potential than that.

First, there's Sarah. If we are to believe the time frame you've given us, Jacob has already murdered her husband. Given that there's some kind of funky quality to the boy's parentage, which the mother must surely be party to, it simply doesn't work that she'd go to a parent/teacher conference as though all was normal. By this time, she'd be screaming for a priest, preferably an exorcist.

You need to settle the question of who this story is about, and what their story is. Right now, you seem to be equally divided between the three characters. Even though it starts out from Jill's point of view, thereby nominating her as main character, you kill her off at the end, always a risky procedure. And even though she's your main character throughout most of the story, she really doesn't have a story of her own. You seem to be trying to make the story about Sarah, which keeps the focus split to decidedly diluted results.

When you inject supernatural horror into a mundane, real-world setting, you need to recognize the progression that a normal person would go through, the kind of person that doesn't really believe in magic or realms beyond the senses. The first bits of evidence would most likely be discarded as they refuse to process what cannot be explained. I didn't see that. Must have been my imagination. Next would come grudging acknowledgment that something is going on, but a psychological explanation would be enlisted. I need to get more sleep, or, I've been working too hard lately, or some such. Most likely anger would be employed in an attempt to forestall acceptance of the impossible. Keep in mind that your reader will be working through their own progression as well. You can't just throw magic at them with no preparation and no explanation, and expect them to absorb it. They may well take your word for it, as would be the case with this story, but it won't be something that they experience internally. The high-point of their emotional response would come at the same time the main character can no longer deny the truth: there really are monsters, and they're out to get me.

So what would this story look like if you gave it the room to develop organically, and placed Jill's story at the center? It would be about her relationship with Jacob, something you now only refer to. Jacob's transformation has to be seen through Jill's eyes, but it's just something we're told about. All the interesting development has already taken place. Another essential ingredient which you introduce and then dispose of in a couple of sentences is the oh-so-crucial misdirection, in this case Jill's assumption that domestic abuse is involved. If this is going to be Jill's story, you need to make her proactive as she tries to unravel the mystery of Jacob's transformation. Does she visit his house? Maybe. Does she work to compile evidence in support of her suspicions? Most definitely. Does the reader follow along with her, waiting to see if she makes the case. I think they will. Does Jill encounter weird bits of incongruous evidence that don't quite make sense? Sure, given that she's looking in all the wrong places.

I don't really want to tell you what to write; the possibilities are endless and it's your story. So consider a similar situation. Imagine a detective story in which the main character bursts into a room where he knows the suspect is hiding... and to his shock, sees him levitating in the middle of the room surrounded by a blue glow, whereupon he simply vanishes. At this point, there's no longer any mystery about what the detective is confronting. Or, on the other hand, magine a crime scene that suggests to the detective that the only way it could have been committed would have been for the suspect to be able to levitate and then vanish, leaving no trace. Clearly impossible, but there is the evidence. So now you have a mystery. And your readers will keep reading to see how it all works out. They might have kept reading in the first instance as well, but it would have been for a different reason, to see how you juggle obvious magic.

Which is another task you'll have to deal with. Sooner or later, Jill will have to come face to face with Jacob's true nature. Right now, it's Discovery> Instant Defeat which again deprives the reader of an opportunity to involve themselves in the action.

And do you really want Jacob to win? Is he worth it? You raise many existential questions, and simply because you ignore them doesn't mean they aren't lurking beneath the surface of the story. You might try dealing with a few of them.

I wouldn't bother with all this, except that you're a good writer and you have a germ of an ideal here that could grow into something significant.

Are you up to it?