To be clearer, I think those 'al' VS. 'el' are a bit pointless. In formal Arabic, you would pronounce اَلْـ as /æl/ with the sound æ (i.e. the same sound as A in pal). If you speak informally though, the vowel sound becomes shorter and and less open, therefore becoming /el/ with the sound e (i.e. the sound as E in bell).
P.S.: Here formal/informal is not related to dialects. Formal speech would be over pronounced, whereas informal speech would be more natural and fluid.
no that's the silencing diacritic, does not mean do not read the letter, i means there is no short vowel sound after it. Every letter has its own diacritic, silencing is a valid diacritic for all letters, including vowels. Alb(a)yt, Alw(a)qt (notice how the "w" had an "a" sound, then the letter after "q" was silenced
here is an example of all moving letters: s(i)w(a)r: سِوَر
To push further, an example of when the "y" has its own non silencing diacritic: