W's mama- just wanted to add my ds experience with phonics and sounding out words. (He's 5.5 in kindergarten was reading 2nd grade in August). Yet, he did struggle with sounding, but was good at replacing the word with a synonym. Thus, if I wasn't right there, the sentence and story still flowed. I started sitting with him, stopping him, making him sound out the word &/ or showing him how to break apart the word. By November, he is definitely improved. He is more like a strong 3-4 grade level reader. (I am still trying to get his teacher to adminster another STAR test to bump up the AR level of books he can read at school- frustrating!)Also, he speed and endurance improved.
I'm sure your dd is close to figuring it all out with a little support. Good luck!
One other thought. At our school, sight words are sent home, that is memorization. One component of reading is memorization. If you had to sound out each and every word, it would take 15 mins for 1 sentence.