Two points. First, my guess is you mean 35mm. In my experience, and for what I try to accomplish via the pinhole medium, 35mm is too small of a negative to enlarge cleanly. They always look fuzzy. Try 120 film either with a home-made, converted or purchased camera and the enlargements will be much more clear.
Originally Posted by Kinetic
Second, I suspect that the watch metal is thick enough that you are getting the "tunnel effect." Light bounces off of the sides of the pinhole itself causing diffusion. Here is a link to a thread on f295 where Earl Johnson sells electron microscope slides mounted for use as pinhole. They are excellent, with thin metal and precise apertures; and they are cheap. I use them for nearly all of my own photos.