VS5704 is a VS code share on a DL operated flight. When you booked it would have said something like 'operated by DL' - it certainly does on the VS and DL websites.

As they caused the initial delay then DL were responsible for rebooking you.

As you have found out DL does not have a premium economy cabin so they put you in their nearest equivalent. The alternative was for them to put you on the VS flight the next day (with you likely having to pay for over night accommodation)

I've looked at the DL website and as far as I can tell there was a flight that leaves YYZ to JFK at around 6.30 and gets to JFK around 8 but there may have been no seats on it to put you on - equally it might not have been possible to rebook you on one of the VS JFK-LHR flights.

I appreciate this is frustrating but I really can't see that DL have done anything other than get you home as soon as possible.