Mostly by shrinking the bezels tho

The 42mm refers to the case size. You are right that screen is bigger on the new models with the same case size.

> The Apple Watches have also been getting bigger.

A large watch face has always been a style people into watches go for. It's not just a digital smartwatch trend.

This was a style thing that tended to ebb and flow. The trend in the 2000s was to have really big watch faces but by the 2010s people were calling them “dinner plates” and it started to be viewed as kind of tacky and ostentatious. Smart watches ended up recalibrating people’s expectations but, if they hadn’t shaken things up, I think we’d be leaning towards smaller faces by now.

In fact, fashionable youths these days are wearing those vintage Casios which come in at 35mm to 39mm.

Pretty much All watch manufacturers have <40mm models.

And the sky is blue. Your comment does not dispute the fact that larger watch faces is a style people like. Because you don't does not invalidate others do

The 42mm measurement on an Apple watch is the lug-to-lug size, which usually corresponds to about 37mm in standard watch size.