Some Extra Pointers
In addition to these steps, another way to add to the comfort of your watch would be to take a look at the watch itself, especially if the irritation comes from the watch case-back.
First off, although it may seem extreme, you could change the watch! Obviously this doesn't fix the problem, but the watch material itself may be the issue. Try swapping the watch for one with a different case material, like the bio-ceramic MoonSwatch, a plastic watch from Casio, or even a watch with a glass exhibition case-back to reduce the metal against your skin.
If changing your watch is out of the question, try swapping out the two-piece strap, for a one-piece strap, this change will add a layer of fabric between the watch and your skin helping reduce metal contact and add a layer of protection.