Unlike the Arsenal and Watertown Malls, the proposed Walmart is sited about a half mile from Watertown Square. Also unlike the malls, which are separated from residential neighborhoods by light manufacturing and office buildings, the Walmart will abut one residential neighborhood, and be across the street from another. It will be behind the United Tile store and Peter Fuller Auto Rentals. It looks like a proposed entrance is at the edge of the lot with the billboard across from the Toyota dealership.
In the picture, taken from the Watertown Zoning Map (PDF), the light and dark yellow areas are residential. The gray areas are industrial. There's a proposed site plan on the Watertown Tab web site or, to get a better sense of the site and the surrounding residential neighborhoods, see the satellite view from Google Maps.
It looks like there are over 50 residences within 300 feet of the proposed store.
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