yes, the human mind is truly a miracle and a mystery. I remember when I first decided to focus my college studies in psychology/sociology, in particular counseling (as well as research). Many of the classes dealt with just such things. I remained fascinated with it throughout my schooling, and still am.
Another area where the perception of words as a ''whole,'' rather than each individual letter (hmmm .. kinda' like Gestalt Theory, ''the whole is greater than the sum of its parts''), is in typing / keyboarding. I began taking typing lessons when I was in 7th grade, and by the time I was a Junior in HS was assisting in teaching both beginning typing and Gregg shorthand classes. The reason I became very proficient at typing was due to my HS teacher drumming into us the idea that, unless you are dealing with odd or unusual words or particularly long ones, you do not type by thinking of each ''letter,'' you type by thinking of the ''whole word.''
Don't know if that makes sense to others, but most above average typists do so without really thinking about it. Back in the ''old days'' of the IBM Selectrics and the requirements of ''no mistakes / perfect copy'' I could type around 130 wpm. Can't do that anymore. The fingers and brain are not as swift as they used to be. The last time I was tested for speed was when Orion was a Freshman and made me take some of the timed tests he had to take in his keyboarding class. My best score was 95 wpm with no errors. (He was impressed ;))