Apple Watch Series 3 has two models, one with a cellular plan like your phone (LTE) and one without (Non-LTE). LTE is compatible with iPhone 6 or later, and Non-LTE is compatible with iPhone 5s or later. Both need iOS 11 or later.
This was correct at launch. As noted above however, this has changed.
I got myself one for chrismas after getting my boyfriend one, should have got both of them at the same time, but he likes it so much, and I had to have one. I love the thing. I have the iPhone XR though so.....
Apple can and will downgrade your Aw3 to watch os 5. when there is no physical damage to the watch, just call them and explain your situation. They will setup a free repair, pickup the watch and downgrade it to the latest watchos 5.
did the same some weeks ago. No problem at all.