It's a generally bad idea (due to auth options for the watch itself). However it's a great 2nd factor.

As far as I know, there are no open APIs from Apple that’ll help. However, I think it might be possible to use Bluetooth Low Energy (BLE) ranging as a proxy for distance. Whether the Watch acts as a BLE beacon or the linux laptop or IoT does the same (or vice-versa) is something to tinker with.