Is there any chance that Apple Watch or wife would not notice a severe apnea condition?

No and yes for wife or a video recording. Get a sleep study for 100%.

My suggestion is an elevated sleep position by increasing your head position with two stacked pillows or raising the head of the bed. It mechanically helps sleep apnea. It got me from a high Apnea-Hypopnea Index (AHI) score to a very low one with the cpap.

The Apple Watch has not shown an ability to identify sleep disturbances or sleep apnea when it should according to my cpap AHI score and when napping/sleeping without a cpap.

Blood oxygen measurements are basically useless from my research unless you need oxygen because you are so sick you cannot walk short distances. Everyone seems to have a different % they function well at asleep or awake. I have also used a much more accurate and faster reading device than the Apple Watch.

No idea about Apple Watch, but wife, definitely. My wife noticed it. (She's also a doctor, but anyone can identify the sound of choking and gasping, which is what it sounds like.)

I can't give medical advice, but: Record yourself on your phone overnight and listen back. If you hear loud snoring with gaps or pauses in between, and especially any sort of choking, gasping, or coughing sound, and you don't remember doing it... definitely look into it further.

A severe condition is very noticeable. The sleeping person stops breathing for up to a minute or two, and then does a sudden gasp for air.

And this repeats all night long.