Q: Cannot set up Apple Pay on Watch

I have tried multiple times to set up my Passbook & Apple Pay w/my brand new watch. I took it to the Apple Store and spent an hour just updating the software on the watch. My iOS is 8.3 and I have an iPhone 6+. My bluetooth on my phone see's my watch "Apple Watch" is connected but when I look at bluetooth on the phone it is "searching" in the devices and never see's my phone (don't know if that is significant)

Also when my watch is "paired" and I un-pair it my watch completely reboots and resets (having to add everything back from scratch) VERY FRUSTRATING

i created a long passcode versus a short one (hoping that would help) IT DIDN"T

Passcode is set to unlock w/iPhone. I also us the fingerprint to unlock the iPhone 6.

Apple Watch software version 1.0.1

Any help would be greatly appreciated