Apple Watch has its own telephone number as that’s necessary for connected devices on cellular networks, but that telephone number isn’t typically used. Both the paired iPhone and the Watch share the same telephone number.
Watch operates as an extension to the paired iPhone, and not as a separate device whenever within range, and with settings common to both, and with notification changes to one effecting both.
You’ll get notifications on Watch, but the data is immediately also available on the paired iPhone. So you can answer a telephone call directly on the Watch, or on the paired iPhone. iMessage arrives on the Watch, and replies can be from either. Watch tends to get preference here, as it’s usually easy to access. But both devices get everything.
Again, think of Watch as an extension to the iPhone, not as a separate device. Though Watch can operate separately.
When out of range, the Watch does power up its cellular radio, but that consumes battery power, and from a much smaller battery than that of iPhone. Watch seeks to avoid that whenever within range of the paired iPhone, and operates “parasitically” via Bluetooth; with the assistance of the better capabilities and larger power supply of the paired iPhone.
The Watch cellular plan is a device add-on feature of the paired iPhone plan, and not a separate plan.
(If you’re old enough to remember the telephone party lines that some wireline customers shared back in the waning decades of last millennium, or the “distinctive ring” that was itself a one-customer party line, this all works similarly. Multiple telephones, coupled together by the wireline telephone provider.)