Blister under watch

This is exactly what an Apple moderator is going to tell you, so get ready. They want to handle those questions themselves.

Thank you for participating in the Apple Support Communities.

We want to make sure you reach the right team for help with your device. We recommend that you contact Apple Support directly. Depending on your region, you may be able to reach them here: Get Support

Yes, that is my dog and thank you. It is reported often, but it can be an allergy to the materials in the Watch, the Watch band, or if you sweat a lot and are wearing the Watch rather tight, that can cause it as well.

Apple will not answer you here. This is a user to user support forum and Apple does not participate here. To speak to them, you need to use the link I provided you.