To learn to read, children must start with phonemic awareness, that is, knowledge of letter sounds. If the child does not understand how to break words down into letter sounds and then put those sounds back into a pronounceable word, not even the most creative project will teach a child to read. Explore phonemic awareness and letter sounds first. Then, introduce simple vowel clustered stories. We must teach children to read one step at a time.
Chapter 4 of my book, After-School Prevention Programs for At-Risk Students, gives more information about intrinsic motivation.