Yes, they stayed in North Carolina. Jean (Allison) Watt died on 14 Oct 1763 and as I understand it was buried in Statesville at the Fourth Creek Cemetery. William remarried about 1765 to Jane Reid. From what I have been able to put together it appears William and Jean had four or five children:
i. William, bc say 1743/56; prob one dc 24 May 1806; m Elizabeth -?- [AF] (William, bc say 1743 (census seems to indicate somewhat later), prob the one dc 24 May 1806; William Watts' will 24 May 1806, wife Elizabeth, sons: William M., James, John (under age); daughters (unnamed, some under age); brother John Watts; Wits: James Irwin, Thomas Watts (Jurat), John Irwin, & Jo Jurat [24 May 1806]
ii. James, bc 1745; d 1834 [AF] (There is only one James Watt (no Watts) in Iredell Co. in 1790, and that would be this man's uncle. In 1790 there is a James Watt at Pendleton Co., SC; 4-James Watts, 3 PA & 1 Laurens Co., SC)
iii. Rebecca (????-????), m Thomas Bailey
iv. Margaret, bc 1755; d 6 Mar 1805 Iredell Co., NC; m c1774 John McLelland (McClelland)
probably v. Jane/Jean, bc 1755/66; d 6 Mar 1805; m (bond) 29 Nov 1787 Valentine Houpe, Wm Watts bondsman; wit: Ad. Osborn["Marriages prior to 1800"].
William also had several children with his 2nd wife Jane Reid: John Watt is named as her son in her 1816 will. The above "probable" Jane/Jean is not named in Jane (Reid) Watt's will as she would have already died, but neither are any Houpe grandchildren mentioned, so presumable Jane/Jean (Watt) Houpe was William's daughter from his first marriage.
Mel, have you researched the Allison family in PA? If so have you seen any Watt(s) documents there?