From what I see watchers only show on Fixed Price listings and not on Auctions. Not sure why Ebay set it up that way. I think personally that the watchlist should be for buyers only and nobody else has any business knowing how many people are watching.
As far as the contact a seller thing are you sure you don't have any information in there that is not allowed like your email address or an offer that Ebay might think is for an off-Ebay sale?