Yes City did buy houses in that area. Frank Swift lived in one around there, but never heard anything about a City player being killed in a bombing raid. Two points worth thinking about - only first team players or new signings from elsewhere were offered housing by the club back then, but others would've been put in rooms around Beveridge St (at one point 3 first team players boarded in a terraced house on Wansford St I think c. 1946.
The other point is that there's a great map in one of the archives in Manchester showing where bombs landed in the city of Manchester. Bombs did destroy a house on Thornton Rd if I remember correctly. I'll see what my notes/records say to see if a house was destroyed where you say as well. Cheers