You do not have to declare any given number of items, you have to declare a given (per country) value of things you bring into the country.
If the watches are cheap it is very unlikely that you reach that value, and even when they are a bit more valuable than you think, you might be on the right side of the duty limits.
In Australia, as in almost every country, you get your main luggage before you come to the customs and inland security part of the border control, so it does not matter where you pack your watches, you will have them when you enter the country.
If in doubt about the value against what is permitted, you should go to 'something to declare' and ask.
But with old watches which are not of a known brand you can likely get away with having them in your luggage.
If you value them, aside from monetary value, you should not put them in hold luggage, as there is always more risk with those for loss and theft. Keep them in your hand luggage and you know where they are and go.
I have not checked out the value you can take to Australia, you better make sure so you know what you can bring.