the addressbus is adressing bytes if you look at it with all bits.
nios is normaly looking at your memory from a 32bit view thus it doesn't know the lower 2 bits
if you access parts of 32 bit = 4 byte within a 4 byte alignment then nios / avalon uses the byteenables to tell the switchfabric what part of the complete 32bit is accessed.
i understand what you want to ask, but the thing is a 8 bit dus width master has N addresbits, an 16bit master has N-1 and a 32bit Master has N-2 bit wide address bus. all of them have the same addressspan in bytes.
if your memory is 1MByte (8bit) then it is 0,5MWord (16Bit) or 0,25MLongWords (32bit)
they all have the same complete memory size, but different bit width.