Lorelei isn't what I'd call a classic name - I don't find cannibal mermaids remotely attractive, and nor did most namers until very recently - but the -lei spelling is accurate. The -lai spelling is irritatingly inaccurate and people will be constantly "correcting" it.
How is
Lorelei confusing?
In your place, I'd name her
Laura,
Harriet, or
Laura Harriet. Or
Harriet Laura.