Children begin to write the way they speak. It's logical to Kelli that her letters run across the page without spaces between them because spoken language is a steady stream of sound. Listen to someone speaking a language unfamiliar to you and you hear sounds flowing together, not individual words. This is the way children hear language. Learning to break it up into its component parts is a complicated skill learned gradually.
Invented spelling reveals what children hear.
If we look closely at Kelli's story we see that she clearly hears the initial sounds of words. We can legitimately commend Kelli for her accurate perception of initial sounds before trying to raise her awareness of consonants and vowels at the middle and end of words. Children's stories contain bits of knowledge from many sources. Later on she may write stories which are a patchwork of all the stories she has heard, perhaps borrowing snatches from Little Red Riding Hood, Snow White, and Cinderella while also including bits of her own experience such as apple picking. This amalgamation of knowledge is not just a charming stage children pass through on the way to writing original stories.