I did this yesterday, and run into the same problem - TWRP spitting out errors when flashing
It was caused by NOT rebooting after unlocking bootloader, but proceeding with the flash rightaway - this apparently leaves the watch in an empty state (no /sdcard or /system contents) and it needs to boot up at least once before you flash anything
So the correct procedure is like this
1) enable development options
2) enable usb debugging
3) adb reboot-bootloader
4) fastboot oem unlock
5) let the watch boot normally, pair with your phone, enable development options and usb debugging again
6) adb reboot-bootloader
7) fastboot flash recovery recovery.img
8) fastboot reboot
9) adb push supersu.zip /sdcard/
10) adb reboot recovery
11) flash supersu.zip
Apparently, there is a problem when the original kernel is not present after "fastboot oem unlock" - the watch will be left empty, while on the original kernel it "reinstalls"
I typed this from memory, but I think you should know how these things work anyway, as there's not much for a "normal" user to do anyway... yet...