As you already know, the Apple Watch cannot be used ALL the time. Sometimes you need to enter your macOS account password, or use the fingerprint reader.
If you are good with the few exception cases where you would have to enter your password, then yes, the Apple Watch is a good substitute for the fingerprint reader.
I have an Apple Bluetooth keyboard WITHOUT the fingerprint reader. When my Apple Watch cannot be used, which is maybe once out of 20-30 Mac unlocks, and for a few privileged operations where I get the dialog box asking for a password or fingerprint reader, I just type my password from the external keyboard. But most of the time, I am able to use my Apple Watch to authorize the privileged operation or unlock my Mac.
In fact there is ONLY one place I need to really use my fingerprint reader, and it most likely does not apply to you. At work they have setup up PassKey logins, and FORCE the use of the fingerprint reader. I am not allowed to use my Apple Watch, nor my macOS password. In those instances, I need to access my MacBook Pro laptop fingerprint reader.
If you do not have a requirement that ONLY allows the fingerprint reader to unlock something, such as my work requirement, then you should be good.