I am not sure why it says it has to be cellular. I have a series 1 watch paired to an iPhone X and it works just fine. You can have multiple watches paired to a single iPhone, but not the other way around. What exactly does the error message say when you ry these steps:
Set up your Apple Watch - Apple Support
to setup the watch as GPS-only? Just to be sure, when you initially unpaired your watch, did you follow the steps in the 'Before you sell, give away, or trade in your Apple Watch' section of:
What to do before you sell, give away, or trade in your Apple Watch, or buy one from someone else - Apple Support
If not, with a web browser, go to: https://www.iCloud.com and sign in with your Apple ID. Open Find My iPhone and select All Devices (at the top). Then click your Apple Watch, select 'Erase Apple Watch', and select Next until the device is erased. Finally click "X" next to remove your Apple Watch. Then setup the series watch again.