I think that every kind of communication is good...including reading and writting. Take a look at the Handwriting without Tears preschool to show how they teach with 'Mat Man' to see if it resonates with you. I don't know anything about Phonics v Whole word but can you do both? We did phonics by singing the Whinnie the Poo song. First DH and it would sing it regualr. And let DS shout 'Poo' after we would pause after THE. The when we all got bored, we would sing the tune substituting La La s(like the 3 singing pigs in Boyton). And DS would sing LOO at that part of the song. You could hold up the L letter block to match and make it dance around. Then we would switch to M and DS would say Moo. Etc on and on. We had no idea what we were doing we just couldn't help ourselves from having fun. About 10 years later we tried singing one song to the tune of a different one...music is big at our house.
You are trying to monitor your own motivations and follow her lead so that's good. It is always hard to know for sure. I just finished a book, 'Dibs in search of self' about a PG 5 year old in 1960 who was misdiagnosed as ED and had a hothousing Mom. The book plays it that the mom was some kind of monster but I 'read into' the book that her academic hothousing saved the kid. I think she was PG and intense and unable to relax and be present but clearly loved her kid and was doing the best she could. I'm not sure if I actually recommend. The book or not as it starts out heartbreakingly sad.
Best Wishes
Grinity