. . . . some (very) slow readers I know seem to look at one letter at a time and have to construct the word in their head before they can understand it.
That's the way most people read a foreign language until they become quite fluent. But most anglophones read English in whole words. (I would imagine it's the same with most languages that are written with phonetic symbols--alphabets and abjads anyway, I'm not so sure about abugidas and syllabaries.) They take in the letters as a group and most of the time all that matters is that the first and last letter are in the right place. That's why it's so hard to catch transpositions in proofreading.
Reading one letter at a time probably slows you down by an order of magnitude. I can carry on a conversation in Spanish with only a little stumbling, but I can't read Spanish fast enough to bother doing it. I'd never get through a novel. And for a language that doesn't use the Latin alphabet, like Russian or Yiddish, it's yet another order of magnitude.
Again, I'd say it was familiarity: accomplished readers recognise words by their shape as much as anything . . . .
I don't think so, based upon this new discovery that we don't care too much about the sequence of the internal letters. Apparently we see all of the letters and do sort of a data warehouse hypercube lookup on all of them at once. The same studies show consistently that one missing, extra or incorrect letter, even if it doesn't affect the phonetics, slows us back down to one letter at a time, whereas transposed letters are not noticed except in long words that can't be taken in holistically.
A year or two ago one member reported a study indicating that people read Chinese logograms faster than phonetic alphabets.
. . . . which probably explains my problems with Russian: all the letters are more or less the same size.
But the same is true of the Roman alphabet. In uppercase they're all the same height, and only a few are wider or narrower than the others. In lowercase the same is more-or-less true for width, and both alphabets have some that are full height and some that are only half. We have five letters that drop below the line and Cyrillic has only two, but I can't imagine that's a deal breaker.
. . . . If you just read for PLEASURE to kill time . . . .
Since when is pleasure the same as killing time???
When reading fiction I often go back over a sentence or a paragraph or a whole page just because I enjoyed it and want to savor the writing again. Or probably just as often because I couldn't figure out what I just read and had to take a second pass through it to get it right. I can read news and technical manuals quickly, but not history or fiction.