Ok, Here is the answer to all your problems... LOL!
Seriously though... I have an Apple iWatch 3 been in a drawer for over a year and not updated or paired to a iphone.
I tried everything mentioned on this forum. What really worked was the activation locks have to be fully removed from the iWatch.
log in to https://appleid.apple.com/, and remove the device from any previous owners.
Example: I owned the watch, it was paired to "appleID1", and I needed to pair for "appleID2". Well, I never removed the device 100% from "appleID1". Once I removed it, boom, everything started working, pairing, updating and successfully working iwatch.
retry steps you have read here for pairing and everything should be smooth sailing.