I‘ve been through all these tips with the previous Watch OS update (7.3) where I succeeded after a full reset unpairing and then re configuring everything.
Today the 7.4 update dropped and I expected the same issues - sure enough I was short of space. I did the full reset, re-paired and once it had completed the pairing it was already over the space limit!! Tried several things - eventually thought I‘d set up with a different apple id - but the setup for someone else option does not work with Apple Watch 3.
My storage was all eaten up after pairing - so I thought my Apple profile might be an issue. Long story short:
On iPhone
- check your phone and watch is backed up.
- sign out (settings -> your name -> sign out) <<< This is the novel approach
- watch app factory reset
- skip as many sign in / setup options as you can
- wait for the initial sync to complete <<< As phone is signed out there is much less to sync!!
- update watch os
Now you can restore from back up or re sign in on iphone and watch.
I also had to re setup and authorize my credit cards in Wallet.
Steve