In my opinion, if he is interested, let him watch! Even if he isn't interested, you might convince him to "help" the younger one learn by pointing to the screen and repeating the words as they are spoken in the curriculum. He will especially gain from the phonics sections!
LR can be adapted so much to be useful to any age. You could download categories that he is interested in from the library and make his own lessons! Have you had a chance to look through the library yet?
The flashing method definitely won't hurt him. The more often he sees the words written while hearing them read, the more likely that he will pick it up. Good luck! And keep us posted!
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