The casing and screen are much of the bulk, but the LTE is no slouch either. If you are ok with e-ink display and no LTE, I’m sure something really thin is possible. But I don’t see something like that with LTE as possible yet. By the time it is, probably the health hardware will be small enough to go along with it.
I think they’re just talking about the bottom with the sensors. They bulge out to get a more accurate reading. It would be more comfortable if that was flat.