I think they were not aware of the level of atrocities that were occurring. Likely the reason they didn’t bomb them was the risk of hurting civilians and captures Allied prisoners.
However, I don’t see why they wouldn’t have gone after the rail lines. Cutting off Germany’s main transport system should have gone a long way to ending the war earlier.
German's transportation system was attacked repeatedly by the bombing of urban railyards and concentrations of infrastructure that might have been vulnerable to carpet bombing. Consider that even in the VN War we spent countless missions trying to hit a rail bridge in the North and finally succeeded only when the first generation of "smart bombs" came on line in the early 70's.