Check box won't 'stick': Can't activate

I have everything checked in this article, but when I click the "allow watch" box, it takes me to the iCloud pref. pane. No idea what it wants. 5K iMac/Iphone 6+, watch OS 3. 2 factor on.

I'm using an admin account with iCloud pw. Both phone & iMac are using same wireless SSID, bluetooth is on, 2 factor on. etc.

No idea why it takes me to the Pref. Pane. I have not set up an iCloud keychain security code, but do have iCloud keychain working fine. Can't think of anything else to test.

Dave