Yes, It can be really tough to balance indicating the mechanic visually (as a loop) whilst also ensuring readability. I suppose for a first time player it's really important to learn the mechanic and then as people play more the focus is on readability.
Perhaps a loop that wraps around the screen could work? As long as it's clear it loops and you can see all the chars on the screen. Maybe something like this HTML carousel demo. Except pressing left/right would move it by one character in each direction, highlighting the middle character that is to be set and showing all the other words before/after?
That's a really smart solution for algorithm. I was also surprised with how quickly I could work out the word combinations in the browser using JS and how I didn't need to optimise it at all.