Not that this excuses it, but I've been able to get this to work by going into the "Downloaded" tab in the Music app. That seems to play directly off the device.

Spotify is just as bad in this regard! It used to handle spotty connections flawlessly a few years ago, but at some point it was altered to keep trying to pull album art and track listings from the network even for downloaded albums.

Is there not an option on Spotify to only stream on wifi?

I have an issue with the Spotify app on the Apple Watch. I’m not sure if it’s an apple or a Spotify problem, but I have loads of trouble when I’m using the watch app to play music when I’m at home, near my phone and near my Wi-Fi network. However if I leave the house and walk away without my phone, leaving the watch to use this 4G connection only, it works flawlessly.

If I come back from my run Spotify will often stop playing as soon as it gets home in range of the phone.

This is a common developer curse. I just ran into an issue at my job where customers were having an issue in the field that we just couldn't reproduce in the office; it took a long time to put together that the issue was related to failing downloads on sketchy networks because all of our networks are stable and fast.

This is so annoying! Every single time I try to play downloaded music on a bad connection it stalls instead of just playing the audio I literally have stored on my device. 100% agree with you that turning on Airplane mode makes it easier to play AM on iOS.