Polarity of alcohols and their miscibility in water
If your book says exactly that, then it says nonsense. Sure enough, the addition of CH2's makes a molecule less polar. As for the solubility in water, methanol is miscible - i.e., infinitely well soluble in it. So is ethanol. How would you compare the two infinities?

That being said, the bigger molecule of ethanol is indeed more polarizable (not more polar, mind you!), and has more intermolecular interactions per molecule than methanol, which accounts for the higher boiling point.