The deluxe package books are for story time in Bigger that you read aloud to them. Carrie has it out-lined in Bigger to do a book for each genre over 20 days. For example, during the first 20 days of the program you would read a book aloud that is from the biography genre. So if you choose the classic deluxe set the book would be Ben and Me, which is a very funny book that my kids loved.

You only need ONE deluxe package though for story time in Bigger; so you would choose either the classic set, boy set, OR girl set.
The extension books are for your 4th grader to read on their own for more advanced independent reading. The schedule for them is in the Bigger appendix. Carrie has the books scheduled to coordinate with topics being studied for each week in the program. My 9 year old did enjoy reading these extension books for extra reading.
I have not ever seen phonics for 4th grade. Phonics usually are completed by the end of 2nd grade. Some spelling program though do incorporate phonics into the spelling work for grades past grade 2.
I hope this is helpful!