Every child is different.
The purpose of the Rat The Cat Reading Accelerator is for the child to have fun while growing as a reader. The point is for the child to have fun with the stories while learning how to read and pronounce new words, and while learning those new words' meanings. This takes some help from an older reader. Returning to the stories, because they're fun, will reinforce the child's growing word recognition and vocabulary.
The "Dictation" part of the lesson might be best used by seeing if the child can READ the sentences, rather than insisting on perfect spelling. But again, every child, and every situation, is different.
When I was creating Rat The Cat it was to help our daughter with her reading. She struggled some. The pictures were just doodles on a whiteboard, and the lessons were what I had studied to teach her next. Rat and Dan were just names I put in sentences to MAKE her learn. I went WAY overboard with the spelling and tests until one day she just fell out of her chair in frustration. Pow! On the floor! She WAS Rat The Cat, I was Dan, and I had turned reading into something miserable for my kid!
But by the time I made booklets for her first-grade class, the stories had become the focus, and those stories left them asking me for more. Stories are fun, and little humans want to be able to enjoy them, and they read them more than once. Stories are fun, while in many cases lessons are something to be survived. Especially if you're a child with learning difficulties.
Maybe a guideline for Rat The Cat is simply to err on the side of fun and simplicity.