I was having the same issues with my series 3 Nike Apple I watch. I had tried everything on this forum and nothing helped.
Then I read where someone had deleted the iwatch app from their phone, hard reset the watch and their phone, then manually paired their watch. It worked!
So, do this:
—Delete the iwatch app
—Hard reset the watch (factory default)
—Hard reset your phone (volume up and down and the power at the same time) If you can’t do that, then just restart your phone
—Make sure your phone is still connected to wifi
—re-download the iwatch app
—when pairing your phone and watch, be sure to do it manually.
Then, you’ll be able to download the needed software to proceed!