DD(yr1) is coming home with orange level books. At home she reads anything and everything and her comprehension is excellent. She finds her school reading books a bit of a chore and just something to be got through until she gets back to her "real" books (which I occasionally make her read a section aloud just to check).
We visit our local library each week and also have probably too many books at home she has access to.
So does her reading book level matter as long as she's reading?