The sparse foliage in your grass would not be from nightcrawlers. They can cause bumps in the lawn from their castings which they bring to the surface, but those can be raked to smooth them out. For the most part, nightcrawlers are beneficial in aerating the soil and turning organic matter into humus.
It's possible that improper pH could be involved, but excess shade from the trees and house is more likely. You can check the pH with a simple soil test available through your county extension service or a private soil testing lab.