(For context, this is just a partial grammar I'm making for a fantasy project of mine. Not a full conlang, just the illusion of one to make the words feel real)
Okay, let me break down the vowels, maybe by explaining it I'll understand it better:
There are 5 vowels: a, e, i, o, y
A and O are back vowels, A is said like "ah", but more open (like in Spanish, German and Portuguese).
E, I and Y are front vowels, E is said like "eh" (same as A), i is pronounced either as "ee" or short i as in "hit", depending on the word. Y is basically German ü (frontalized "oo" sound), but may be pronounced as "oo" in certain words depending on dialect.
Both back vowels and front vowels may take the diaeresis sign, with slightly different uses. Most commonly, it's used for a and e.
The sign first appeared to mark diaeresis on the letter e, that is to say it should be pronounced where it normally wouldn't:
Because e was also used to frontalize a and o (just like in German), the sign basically came to mean "there's an e sound here", so ä and ö were developed as alternatives to æ and œ. Both versions are, as of today, valid.
Shihærrae -> Shihärrae (in the case of ae for plurals, it is just said as e, which sounds like ə)
Ï can grammatically happen, but it's very rare. Ÿ does not occur.
(If you're reading this, feedback is welcome.)