Interesting! This might be our Scrabble bias showing through. Yes, when we say "word" I suppose we're meaning "something that a player has claimed to be a word" by placing contiguous tiles. I'll look at somewhere to clarify language in the tutorial.
Very interesting thread! As computer people, I suspect "string" would make sense to encompass both "sequence of letters" and (valid) "word". But that wouldn't work for most people. Maybe just "sequence"... Or maybe just stick with "word" but add this caveat to the tutorial, like you were thinking :)