I have tried digital crown for this, but it was not too good to use. But thanks for suggestion!

How precise is the gyroscope in Apple watch? Can you turn on constant movement in Quake, and then just use watch movements for turns/aiming, and the side button/screen tap for fire ?

Extremely accurate. You might be surprised how much. They have a feature where you can use the watch one handed without touching the screen https://www.youtube.com/watch?v=UFCGfyHSbFM

That seems like the worst control scheme ever... no visiq/feedback, just a bunch of screen transitions based on micro gestures? No thanks.

It's designed for people with only one hand so its better than literally nothing.

True.