Woot, getting there
What I had to do was ignore setting up a scrollchild frame and parenting that to the watch frame but tell the watchframe to be the scrollchild itself. It needs some more work though but definitely an improvement
Edit: Okay, maybe not working quite the way I'd hoped
Edit 2 : One step nearer.
Frame 1 = Standard Container Frame parented to UIParent
Frame 2 = ScrollFrame parented to Frame1
Frame 3 = WatchFrame parented to Frame2 and set to ScrollChild
Will mean that there is a gap around the watchframe to the container frame but still not properly working as moving the container frame just highlights a different part of the watchframe as if you were scrolling.