GPS lets a device determine its coordinates. That's it. Cellular service is required to plot those coordinates on a live, updating map. These are two separate things.
As an example of how this works in practice, the GPS-only watch won't give you directions home, but if you're on a run, it tracks your route (as a series of coordinates) and when you're back home and have internet, you can then see your route plotted on a map.
Yes. Apple Pay was introduced on the iPhone 6.