I have dropped and withdrawn from classes at SFUS (I'm an alumnus and was accepted into grad school, both in STEM).
For highly competitive programs you may need more explanation, but for UC and lower ranking schools, I think a simple line of text explaining is sufficient.
Of course, you should seek advise from your mentor at SFSU (or your department councilor) and ask the admissions office of the grad school you want to attend for their advise (they will provide far more help with the application process than most student realize!) Also, contact the professor you want as your grad advisor - they have power and often they can push acceptance for a student that they find promising regardless of bureaucratic boxes checked.
Finally, deep breath, you sound like a thoughtful hard working student ... I'm sure you will get into any grad program you want to!