You are going to have to erase your watch to pair with your new iPhone. Not much need to have a watch backup unless you don't want to have to make all your customization or setting again.
As to if you want to have a backup of your watch and simply restore it after you upgrade to your new iPhone that depends on how you plan to upgrade from your old iPhone to your new iPhone. Note: the backup is done on the old iPhone since that is what it is paired to.