Is it possible to factory reset Apple Watch without losing data after too many attempts?

You won't lose your data (at least not most of it) because Apple Watch mirrors the data in the paired iPhone. The only data at risk would be anything collected by your Watch but never uploaded to your iPhone, so if you were working away from the iPhone you might lose an hour to two. I think that is tolerable.

If you have to setup again from scratch the data will re-sync from the iPhone, so if there is a lot stored there it might need some time. Just be patient and don't panic.

The only things you might find not restored might be downloaded apps (just download and install again, a few settings like preferred watch face (no big deal to restore manually) and you will (should) lose any Apple Pay activation on the Watch. This is a security limitation and it only takes a few minutes to re-authorize again.

If you have Apple Pay cards setup on your device and you have to reinstall and setup again I have one suggestion - skip the Apple Pay activation, delay it until you have the rest of setup done, and everything else is working. The reason for this suggestion is simple. Most card providers use timed SMS type messages as a security check when reactivating but the device is still installing and the security code often times out before you can see it.

If you have iCloud backup enabled, it backs up your watch along with your iPhone.