Yes, the watch will work with any model CHiP.

They are made of rubber, you won’t be able to fix overstretch. You should source a replacement.

You will need to disassemble the Chip, remove the main board, the rear leg clips and then the rear gearbox. Your problem sounds like the gearbox, open it up and you’ll probably find damage to some of the plastic gears. Those will need replacing.

Some of the plastic gears in the wheels will be damaged (if you try turning the wheels by hand you will probably feel them grind and stick, they should move freely). It’s a complex job because you need to remove most of the internals to get to the legs, but then then you can inspect the gears that are damaged and replace them. Use silicone grease on the new gears to keep things moving freely.