You're right, but that's a fairly myopic comment too.
Is the iPhone just a phone? I don't think so.
Again, my hope is that the "iWatch" is not just an electronic watch with a couple of apps (AKA Samsung Gear). I think it has to be different in order to be relevant and to be a truly viable product. I haven't seen any break-out smart watch products yet; I don't think anyone really knows what a smart watch should be.
Yes. My limited imagination sees the most compelling uses as mobile payments and as a proximity sensor to enable/disable your Apple hardware.