Hello all! I was having the issue of "cant update because you are not connected to the internet" when I very much am connected. This is how I fixed mine:
Hard reset watch (press & hold crown) then turn it off (press and hold button under crown)
2.RESTART Iphone
3.Go to settings>General>Iphone storage>watch(the app)
select "delete all backups/files ( The button is in red at the bottom)
5.Follow step 1 again (if needed) but now you will select "delete app" and confirm it.
6.Reinstall "watch" app , turn watch back on, then open & pair
7.Follow prompts to update!
Things that may help:
be on a trusted & stable WI-FI connection
2.log out & back into your icloud on Iphone
3.remove watch from your icloud account.
4.make sure Iphone is up to date.
Hope this helps!!!!