Arghmyear, you said: 'I take your explanation, but think that my DS is not quite at the level to know a good amount of the variant spellings. He knows simple ones like ee could be ea. Or that ai could be a-e or ay.'
I and my colleagues have trained over eight thousand teachers and TAs in England over the past nine years and we know that you can teach at least three or four spelling alternatives to children in YR/Y1, if their segmenting and blending skills are good (i.e. they can segment four- and five-sound words like 'crab' or 'twist').
I'd start with three or four different spellings of each sound. When he has covered all the sounds, you can go back and teach more spellings.
The pupil I was talking about is eight years old, which is why I taught her five spellings of 'er'. For your DS, I'd teach, perhaps, three , and and add in others as you cover them in his reading.
The problem with teaching one spelling of a sound, as advocated in Letters and Sounds, is that you teach one sound and one spelling, followed by another sound and another spelling. Pretty soon, you lose the connection between sounds, which children learn naturally, and the spellings we have invented to represent them. In the meantime, children see in their reading lots of other spellings of sounds, which they can't work out because they've not been taught them and then they think that the the 'system' is madly chaotic. It isn't if it's taught properly.
There are only forty-four sounds (forty-five if you're a Scot) in English. If they are always your anchor, after the one-to-ones (the sounds represented by a, b, c, d, e, etc, plus ff, ll, ss, zz, and sh, ch, etc.), you then teach all the rest of the vowel sounds/spellings and the consonant sounds/spellings, a few at a time for littlies and more for older children.
And then, whenever you come across a sound/spelling combination not yet introduced, just point to the spelling and say, 'This (whatever it is) is X. Say X here.'