Greetings jpb822,
Welcome to Apple Support Communities. We suggest unpairing the Apple Watch from the companion iPhone, and then setting it up as new. You can then update the watch, and then restore from the backup. The steps are found in the Apple Support article: If you don’t have enough space to update your Apple Watch - Apple Support
"Unpair and update your Apple Watch
- Keep your Apple Watch and iPhone close together as you unpair them.
- Open the Watch app on your iPhone.
- Go to the My Watch tab and tap your watch at the top of the screen.
- Tap the info button
next to the watch that you want to unpair. - Tap Unpair Apple Watch.
- For GPS + Cellular models, choose to keep your cellular plan.
- Tap again to confirm. You might need to enter your Apple ID password to disable Activation Lock. Before erasing all content and settings on your Apple Watch, your iPhone creates a new backup of your Apple Watch. You can use the backup to restore a new Apple Watch.
Next, set up your Apple Watch with your iPhone. When asked whether you want to set up as new or restore from a backup, choose to set up as new. Then follow the onscreen instructions to finish setup. If you want to update to the watchOS beta, reinstall the beta profile after setup is complete.
Finally, update your Apple Watch."
Feel free to reach back out if you have any questions.
Have a great day!