You are quite right Manchester United was seen to represent the Roman Catholic side of Manchester. Indeed My parents and grand parents were Catholic. They were very strong United followers.
My brother and I were educated in Catholic schools. Salford had a very strong Catholic representation.
I think that United were Catholic before Busby came and he strengthened United's Catholic reliance.
As far as I know there was no bitterness among the Catholics and protestants.
I lived and worked in Scotland and Celtic and Rangers had religious attachments. I would say that the differences in Scotland were more strong than in England.
I went to watch a couple of Rangers v Celtic games. They were played on New Years day and there was lots of crowd problems.
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sj