Re: Storage on iPhone for Watch Backup
Yeah iOS doesn't seem to list this anywhere, although I'm sure you're fine with what storage you've got.
Apps, music and photos, which would constitute the bulk of your data, originate on the iPhone, and therefore do not need to be backed up separately. Health data is synced to the Health app on the iPhone, and you can see that it hardly takes any space.
That leaves app-specific settings and cache, which I'm guessing are negligible since it's unlikely Watch apps store massive amounts of cache locally like some iPhone apps do. Settings are usually measured in the hundreds of kilobytes, or low megabytes at worst.