It was because they were sorry, too, that they had not gone to school more.
This is a grammatical sentence whose meaning is clear. When more is used this way - “they didn’t do X more” it means “they didn’t do X more than they did”. To be more explicit, for this particular sentence:
It was because they were sorry, too, that they had not gone to school more than they had gone to school.
It would be redundant to say (or write) that whole sentence; more by itself conveys this meaning.
not much is different - it just means “not a lot”. In this context they were probably sorry they had not gone to school much but we don’t know that for sure. Maybe they did go to school much of the time, but still regretted not going to school more than they did.