We actually use a reading/spelling program that says that, despite what people think, most of English *does* follow rules. The problem is that people just don't know that many of them. Yes, i is often before e, but there are classes of words that have ei (like neighbor, weigh, etc.), etc. I have learned *so* much from it! Like why have and give have an e at the end... because English words don't end with v. And why horse has an e at the end... because it clarifies that it's an s sound, but not a plural word. Sometimes the words are borrowed words so they follow the rules of the language they come from, etc. You see that in some ie/ei words that come from the German, where two vowels generally means you pronounce the second vowel as a long sound.
I think that the silent e making the vowel says it's name is made clearer if you say that the silent e makes the vowel *long*. The problem is that kids often have trouble understanding what a long vowel is. So we often say that a long vowel is when the vowel says it's name. It's true for most of the vowels, but u can either say yoo or just oo. So you have to give that little bit of explanation in there. I think there is actually a rule for when it makes the yoo sound (cute) or just the oo sound (nude), probably something to do with the consonant that comes before it, but we haven't gotten to that lesson yet.
This reading/spelling program is so interesting that my husband will actually listen in from the next room, and we'll be in mid lesson, and we'll suddenly hear him say, "Really? Wow! I never knew that was why that worked that way!" or whatever. It's pretty funny.
I know how you feel! It's great when you start to realise how regular English is, despite what we're all told and how irregular we all tend to assume it is. Your reading/spelling program sounds pretty cool. The silent e can either go "yoo" or "oo" with u, yes, and there is a straightforward rule to tell which is which. As with most rules in English, it's very near 100%, also.
It's always great to see children who previously couldn't read a thing learn a dozen rules really well and then, a few weeks later, suddenly be able to pick up a book or a newspaper and just start reading off the bat. The trouble is, not many people know the rules, so they end up learning a whole bunch of individual cases instead of the one general thing that covers them all.
SS dad returned today, actually. He was unimpressed that his son learnt the word "girl" before "boy" (we teach the er/ir/ur diphthong before the oi/oy one for no particular reason except that it's more common...) and made this known very loudly and disruptively. As is almost always the case, sadly, the unreasonable parents tend not to just strike once. Still, I thought we'd get at least a week of peace.
Too bad for his son. He's above his grade level in reading and spelling by now at least, I suppose. Poor kid.