From what I've heard on here and my own experiences, when the report references anything regarding "in the classroom and on the court", it is talking about GPA (classroom) and basketball IQ (court).
Basically, the higher a guy's GPA, the faster he will improve at IQ, and the less study hall time you have to give him, meaning he'll improve in other areas faster since he'll be able to practice more. However, in my experience, a low GPA is MUCH easier to overcome (use study hall time as freshman and maybe sophomore, he'll get the IQ eventually) than a low work ethic (where he'll only gain a little even if you start him). Still, it's nice to have guys who had good HS GPAs for both practice time and IQ purposes.