Software optimisations are already pretty aggressive on the Watch and its mostly idle most of the time eg apps get suspended real quick once they have no user interaction and punished for excessive cpu use or cpu spiking. There are obviously exceptions where apps have some genuine background activity or irresponsible developers circumventing those measures but overall there doesnt seem to be any low hanging fruit where Apple can squeeze it much without affecting functionality. There might be some areas of improvement eg how they manage radios (bluetooth, wifi, cell) in some low signal or interference situations but new more power efficient hardware and perhaps some new battery technology are likely to have more significant effect.
Could greater battery life (even 2 more hours), be achieved with a more efficient processor, and further optimizing always on software?