You won't be able to use all of the 8GB of space either, as most of it will be restricted to the iOS operating system and apps that you install. You'll be able to include 2GB of music (around 200 songs) and just 75MB of photos.
The songs and photos that you store on your Apple Watch will be accessible even if you don't have your iPhone with you. If you want to listen to more songs, or view more photos, then you'll need to tether your iPhone with the Apple Watch and stream them from there.
The 75MB allowance for photos seems small, but any photos you import to the Apple Watch will be automatically resized so they will take up less room than the originals, as the small Apple Watch display means you won't need full size images.
Listening to locally stored music will help improve the Apple Watch's battery life, as it won't need to stream the music via Bluetooth, but it does appear that for the best experience you'll need to have your Apple Watch connected to an iPhone at all times.
All three versions of the Apple Watch (the Apple Watch Sport, Apple Watch and the Apple Watch Edition) will feature the same 8GB storage, so even if you splash out huge amounts of money on the exclusive Apple Watch Edition, you're still going to have to carefully manage your iTunes library to fit your favourite tunes on the wearable.