I like to talk (and text message) in fake olde english from time to time, for my own amusement.
Apparently, nobody bothered to correct my mispronouncing of the word ' ye '. It's the exact same word, and pronunciation, of the word "the"!
I have always pronounced it like " yee ", but it's pronounced closer to " duh ", because it's not actually the letter 'y' but a special letter we dropped from the english alphabet, which was a single-letter for 'th' combined (like in 'there').
Unless you're referring to the pronoun ye, which was also the Early Modern English second person plural... as in, "I am talking to ye five gentlemen!".
Also, yes, the y was used in those cases because typesets lacked þorn, so they used y. There was also another character, eð, which was similar.
*Ye*, the article, is pronounced *the*. *Ye*, the pronoun, is pronounced *ye*.