You come up against the usual question about convenience in terms of where the train terminates against the extent to which the bus penetrates the city centre. For anyone living close to Heywood station (it's not in a residential area) the train would probably be better. On the other hand it is unlikely to ever run as frequently as the bus. And attracting current car drivers may need suitable parking facilities: is this a realistic possibility at Heywood?
I live in an area where there's not a lot of housing within a few hundred metres of a station, however most of the settlement is within 1 mile and a LOT of people walk to the station (10-20 minute walk)
Add in some decent cycle parking along with plusbus tickets and the range of the distance people are willing to travel by other modes increases.
Of course there's nothing saying that a) the station had to remain where it is or b) there couldn't be an additional station provided to increase the catchment area (an extra 3-4 minutes of journey time is likely to result in little change to the numbers from the existing station but could attract a lot more people to the service).
Given on this occasion the suggestion is to increase capacity at a central city station, the cost of running the extra services and the infrastructure should be compared against the cost of providing a similar capacity improvements. It also means that increasing frequencies (say 2-4tph) is more to do with improving capacity at the city center station than it is to do with providing a service.
Of course there's always the possibility that given that the station isn't in an area that is residential that you could attract people to travel by train to their place of employment.
The other thing to bear in mind is the potential for improved rail services to other locations in route, or even the possibility to remove calls to minor stations from existing services by switching them to the new services.