The only congested part of the railway network that will be adversely affected by cancelling phase 2 of HS2 is the WCML from Rugeley to just north of Stafford, which is in the North Midlands, not North-West England. I think that a mistake has been made in cancelling the relatively less expensive phase 2a of HS2. However, I accept that phase 2 of HS2 is dead in the water.
Manchester's rail problems can be solved by making better use of existing infrastructure such as redesigning through services to reduce crossing moves on the flat (e.g. all Southport services should go to Victoria platforms 5/6) and increasing train lengths where indicated by demand. Other remedies include adding sidings east/west of Victoria to allow more trains to terminate there but lay over clear of the platforms, mothballing the Ordsall curve, and conversion of secondary suburban lines (to Hadfield, Marple Rose Hill and possibly the Atherton line) to Metrolink.
I'd argue that Manchester's immediate rail problems can be solved as you mention, however that doesn't solve Manchester's wider transport issues (such as congested roads), one of the failing of HS2 Ltd was the poor communication over the potential for increased capacity for the residual services/platforms.
Others will point out that HS2 was due to free up 2 platforms in Manchester, however to simplify things let's look at what one Fred up platform could provide.
Platform X is currently used by 2 long distance services an hour with 11 coaches each. The two neighboring platforms (Y and Z) each have 9 services (total of 18 services) over the hour averaging 4 coaches each (as the local services can turn around within 20 minutes and they stack 3 trains in each platform).
In the future Platform X still has two residual services to cater for the local stations, however these are able to turn around in 20 minutes as they are now local services and are typically 6 coaches long. That then allows 4 services from platforms Y and Z to divert to platform X and those diverted services can be lengthened from 4 to 6 coaches long.
However those services are now no longer taking up platform space on platforms Y and Z, allowing the 8 services which used to share a platform with them to also be lengthened from 4 to 6 coaches. That means of the previous 18 local services 12 have been lengthened.
It could even be that (because we're taking average lengths) that it was a 6 coach service and two services with 3 coaches, the 6 coach service might not be able to be lengthened (due to other platforms on the route it serves), so whilst it may not get longer the other two services could double in length.
That's on top of the significant extra rail capacity which the HS2 services would have provided between the city and the airport through it having much higher capacity trains) could have meant the need for fewer other services to go there.
However, once NPR was built (or at least allowing the running of other services, predominantly TPE and/or XC services) there could have been scope to shift more services to the HS2 platforms, so even more services could be lengthened.
If rail growth sees an annual increase of 2.5% then by 2040 you'd need to provide for 52% more people than is currently the case. Even at 1.3%, that's an extra 25%. Assuming that there's some space currently under used (which I doubt is often the case in peak services) do you really think that you could get at least 10%, and you'd probably need to have a plan for up to 35%, more onto the trains by the measures you've suggested?
There's a good chance that between now and 2040 (even with HS2 going ahead) that you'd have needed at least some of those things to happen just to keep up with demand.
That's before you start to consider what might be needed by 2055, where at 2.5% growth per year we're looking at a doubling of rail use, (assuming a 20% fall from 2019, that's still 163 passengers for every 100 in 2019).
Whilst you may argue that 2.5% growth for a 29 year period may be unlikely, between 2009 and 2023 (again allowing for a 20% fall from the 2019 peak), rail growth over that timeframe has managed to average 2.2% (which given there's staff shortages, strikes and a reduction in services all surprising demand as well as a cost of living crisis, and a major pandemic both having their own impacts isn't bad going). As such, whilst 2.5% might be a bit too high, much less than 2% might be a bit too low.
Therefore, having a plan which allows for 2.5% growth (and slowing down the rate of delivery of certain projects if growth is more sluggish or keeping going if it's on track) isn't a particularly reckless plan.
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