I wonder why everyone is calling Yuu "U-chan"? 'U as in /ɯ/ - 'Ooh', not 'You' for the Japanese ウ- which is not the same, but very close to, the German "U"

Ahh, well, about that...

As "U" in German is pronounced /uː/,

I can't believe that I'm thinking this but.... you didn't read it as romaji, did you? Romaji (lit. "roman letters") = romanization of Japanese. Thus, "U" as Japanese ウ.

Oh my~ That's a nice story somehow, isn't it?

Since she's not yet familiar with Japan, we're trying to show some consideration by using the German reading, see?