though i was not able to highlight a specific letter but an automated line "the letter number 6 that is N is missing" can appear
A1 contains "JAGANNATH" and B1 contains "JAGANATH"
B2 formula =LEFT($A$1,1)=LEFT($B$1,1)
B3 Formula =IF(B2=$E$1,(LEFT($A$1,2)=LEFT($B$1,2))," ")
B4 =IF(B3=$E$1,(LEFT($A$1,3)=LEFT($B$1,3))," ")
B5 =IF(B4=$E$1,(LEFT($A$1,4)=LEFT($B$1,4))," ")
B6=IF(B5=$E$1,(LEFT($A$1,5)=LEFT($B$1,5))," ")
B7=IF(B6=$E$1,(LEFT($A$1,6)=LEFT($B$1,6))," ")
B8=IF(B7=$E$1,(LEFT($A$1,7)=LEFT($B$1,7))," ")
B9=IF(B8=$E$1,(LEFT($A$1,8)=LEFT($B$1,8))," ")
B10=IF(B9=$E$1,(LEFT($A$1,9)=LEFT($B$1,9))," ")
B11=IF(B10=$E$1,(LEFT($A$1,10)=LEFT($B$1,10))," ")
B12=IF(B11=$E$1,(LEFT($A$1,11)=LEFT($B$1,11))," ")
B13=IF(B12=$E$1,(LEFT($A$1,12)=LEFT($B$1,12))," ")
C2 =1
C3=2
C4=3
"( Continue till c13=12)
C13=12
D1 FALSE
D2=LEFT($A$1,C2)
D3=LEFT($A$1,C3)
D4=LEFT($A$1,C4)
D5=LEFT($A$1,C5)
D6=LEFT($A$1,C6)
D7=LEFT($A$1,C7)
D8=LEFT($A$1,C8)
D9=LEFT($A$1,C9)
D10=LEFT($A$1,C10)
D11=LEFT($A$1,C11)
D12=LEFT($A$1,C12)
D13=LEFT($A$1,C13)
E1 TRUE
E2=RIGHT(D2,1)
E3=RIGHT(D3,1)
E4=RIGHT(D4,1)
E5=RIGHT(D5,1)
E6=RIGHT(D6,1)
E7=RIGHT(D7,1)
E8=RIGHT(D8,1)
E9=RIGHT(D9,1)
E10=RIGHT(D10,1)
E11=RIGHT(D11,1)
E12=RIGHT(D12,1)
E13=RIGHT(D13,1)
F2=VLOOKUP(D1,B2:E13,4,0)
F3=VLOOKUP(D1,B2:E13,2,0)
Final Result at C1 ="the letter number "&F3&" that is "&F2&" is missing"
Cheers
YD