I use it for that purpose, and I think that it works very well. I used to use a Fitbit before this, and I will admit that the vibration on the Fitbit was a bit stronger than on the Watch. Still, I haven't had a situation where the watch has not woken me up. I don't think that I'm a super light sleeper, but of course, I don't know how I compare to other people.
Regarding comfort, I use a Milanese loop band, and slightly loose and it. Surprisingly, it's not uncomfortable at all.
As of version 3 of the operating system, they have introduced "theater mode," which makes it so that the watch screen does not light up regardless of which orientation your wrist rotates. It's perfect for sleep, because that way, no matter which way you move in your sleep, the screen will not activate and awaken you (or anyone who is sleeping in the same bed).