My son reads and adds words that aren’t there. He has trouble sounding them out. He also has trouble recognizing long and short vowel sounds.
Adding “ghost” words while he’s reading is fairly common, especially if he’s uncertain of the reading text or if he’s only been trained in learning sight words. Sight words training would also explain why he has trouble sounding out words. He might not be comfortable attacking a word, so he guesses at what he thinks might be the word, based upon other words that he has had to memorize in the past.
Making sure that he knows his alphabet letters and sounds is the first step. Next, make sure that he can blend these sounds into simple phonetic words–c a t, blended together says “cat,” etc. Many programs and teachers leave out this very important blending step that gives kids the confidence and skills to be able to sound out the words they are reading. In my class, I spend many weeks on blending concepts as we continue to learn new alphabet letters and sounds and then apply them to phonetic words.
Going back over the letters and sounds would help him with his short and long vowel identification as well. He should be very comfortable with the short vowels before he branches out into the long vowel sounds. Hope this gives you some ideas that may help.