Our language is a phonetic langugae - that is, the words are constructed of letters to represent the sounds in that word. However, because our language has varied origins, the phonics is complex. Yet, more words are phonically regular with all the alphabet code knowledge. It is incomplete phonics knowledge that makes some words seem harder, or more irregular, or needing some sort of whole word treatment.
The word you used - 'here' is indeed one of those really tricky ones, but I'd be interested in hearing what other ones ds1 is also have trouble with.
The two pronunciations of each letter? I wonder what you mean by that, exactly. Perhaps you could clarify?
Basically, with our written language, it was the spoken words that (obviously) came first. There are about 44 different individual speech sounds and these are represented by 26 letters. Clearly not enough for one letter to be for each sound, or even 2, as there is such a variety of spelling.
For children that struggle, I think it is confusing to approach reading from the letters, by saying they have sounds that they make. By looking at the letters on their own, it will get incredibly confusing, especially by attaching their 'traditional' sounds to them, which are usually their most common sound in the initial position. e.g. 'r' taught as rrr as in the start of 'red' will make things tricky when words such as 'dark' and 'world' are seen. 'a' is used in the sounds ai, oa, ea, ar and air.
To make sense of this complex nature and ensure that enough knowledge is acquired to make virtually any word decodable independently by children, it is necessary to teach them all the sounds and their related spellings in a systematic and thorough fashion. The chidlren are then taught how to blend these sounds all through a word, to read it in its entirity. Doesn't sound incredibly exciting, granted, but by following a scheme such as Jolly Phonics, it is fun as it is multi-sensory which also means it is picked up quickly and it is fast paced which means results are seen quickly which makes it very motivating.
For support reading material; words would only be encountered in structured sessions that were comprised of sounds and letters already taught. There is no point teaching a set of sounds and letters and how to blend them and then expecting a child to read a word that is made up of more complex sounds and letters. So, words such as 'here' would be left for later.
HTH for now