Un pairing Apple Watch and iPhone and deleting information on the Apple Watch

Yes, a successful unpairing effectively erases all the content from the Apple Watch and restores it to factory (blank) condition. Your confirmation is that the watch would be showing the initial pairing screens as illustrated in Set up your Apple Watch - Apple Support. If it still showing the time or any other screen the unpairing and erase did not complete successfully, and you need to erase again using the second method (watch-alone) from If you forgot your Apple Watch passcode - Apple Support.

Note that unpairing or any other erase method does not remove the Activation Lock which is stored externally in your Apple ID. If you are wiping the watch to sell it please see notes in What to do before you sell, give away, or trade in your Apple Watch, or buy one from someone else - Apple Support

No, you would have to erase all data if that is what you want to do.