The screen size is actually smaller than the S7.
It absolutely isn‘t. The Ultra screen is bigger both in number of pixels as well as surface area in square inches/mm.
I compared identical watch faces at the apple store and the ultra face is VERY slightly smaller when comparing font size, circular Watch face size.
The only way this observation makes any sense is when some of the Watch faces are not optimized for the Ultra screen. Which is certainly possible.
The bezel on the ultra is kind of off-putting as well.
The visible bezel of the Ultra is a little bigger than that of the S7/8 but smaller than that of S4-6 (let alone S0-3). My guess would be that the actual bezel is actually not bigger at all but on the Ultra there is no way to hide part of it underneath the rounded metal enclosure the way S7/8 can. OTOH, perceptually you always lose some part of the S7/8 screen to glare, exactly because of the roundedness. After seeing both screens side by side, I vastly prefer the flat Ultra screen, even with the (slightly) bigger bezels.
Also the screen looks like it’s not as laminated to the glass or something. Like there’s a gap between the glass and the screen.
Here is where I start to question your observations because to my eyes it is exactly the other way around. Also, this is precisely how the S7 was advertised: as having a thicker front crystal (and thus being more shatter proof). Thicker crystal = display farther away from the surface.