My review book (Princeton review) says that ethanol has stronger
intermolecular forces than methanol because it has a large molecular
mass and is therefore more polarizable
Ethanol does on a molecule by molecule basis have stronger intermolecular forces between itself and water than methanol and water.
and more soluble in water than methanol.
Yet, my chemistry textbook says that both ethanol and methanol are miscible in water, but the more the carbon chain increases, the less miscible it becomes.
As you increase the number of carbon-chain linkages the polarizibility of the molecules does in fact increase.
However, the thing that makes small chain alcohols soluble in water is not the fact that you can induce a non-polar bond to have a short lived local dipole (van der Waals forces), but because of the permanent dipole of the alcohol group. The hydrogen on a alcohol (or water) is very positive and the oxygen is very negative, so they attract other polar groups around them in a fairly well ordered manner. For short chain alcohols the alcohols at the end of the chain can take the place of the oxygen and hydrogen on other water molecules and with the entropy inherent with mixing can be miscible with water.
For long chain alcohols the non-polar chains can be polarized, but they do not interact with water nearly as strongly as other waters and the entropy inherent with mixing is not enough to offset the energy difference. And so if there are any other waters "nearby" the water molecules will self-segregate, as water is more attracted to other waters than to the non-polar chains that they are inducing into forming dipoles.
As you add more alkane linkages the molecule becomes less polar but more polarizible - but this does not add much (comparatively) to the solubility of a non-polar molecule in a very polar solvent like water compared to highly polar groups.