Luna is viewed by some people as being a little insane, but there is a huge difference between stupidity and creativity. She obviously knows actual facts, and understands how the wizard world words. Luna just likes to add little things on to the basic knowledge that everyone has. She believes that a gnome bite brings good luck, and that a butterbeer cork will keep away nargles (nargles are another thing that she believes in). Does this make her stupid? No, it does not. It only means that she has the ability to see past common knowledge, and believe. If anything, this makes her more intelligent. Someone who is very close-minded will never be able to learn new things, or try new things. Much like the way a muggle is too close-minded to learn about the wizard world, some witches and wizards are too close-minded to learn about the stranger wizard world. Instead of mocking her, some of Luna's classmates could have considered her point of view for a moment. Than maybe they would have understood her a little better.