Hi Dave,
the compiler needs the path to the header files physically resolved. So pointing to a 'physical' folder does not help, as the file system has no link in it: only the IDE has the links, not the file system.
This does not mean that you have to provide full absolute paths in the compiler settings: you can use workspace or project relative or variable relative paths.
The compiler operates on the files system, so you have to give him file system information.
I hope this makes it clear.