One referee report is awful. Comments are basically two types:
Please re-invent the wheel and write a primer to the whole field.
Must supply more basic background to the field (analogy: paper is about one aspect of mouse genetics, referee wants me to explain what genetics are, and what mice are - the request is that broad, that absurd.)
Must supply all details of my source material because paper must stand alone, just referring to previously published work (mine and others) is insufficient (That would require a shelf of books to cover it.)
Clearly you don't understand the technicalities of the subject.
I don't understand the subject. (I quite literally wrote the standard reference book).
I use the technical terminology wrong. (This is a "scientific use" / "popular use" issue, I think; they use the looser laypersons' definition, I use it as per our discipline.)
Half the publications I refer to don't understand the subject either. They are wrong about everything. (Again, these are publications by respected authorities.)
Editor says "revise and resubmit". But how? Do I just write to the editor and refute these points one by one? What are my likely outcomes if I do just that?