How does Watson change throughout the novella? How does Conan Doyle structure him?

In the opening scene of The Sign of the Four Watson is intimidated by Sherlock Holmes and upset with himself for not having the courage to confront him about his frequent injections of cocaine and morphine. Despite his medical expertise, Watson describes himself as "diffident" and Holmes as "masterly." Watson summons the courage to point out the possible permanent consequences on Holmes's brain, only to hear Holmes say that his brain needs stimulation, whether it is a puzzle, problem, or drug. Also in this scene, Holmes belittles Watson's attempt at writing, and as Watson defends his work he reflects resentfully on Holmes's ego and vanity.
However, Watson must credit Holmes for his extraordinary powers of deduction, and he is quick to abandon his negative thoughts about Holmes when Miss Morstan arrives and Watson is asked to accompany Holmes in the investigation.
Watson gradually becomes more assertive; he is both attracted to and protective of Miss Morstan and engages with her while Holmes retreats into his own thoughts. Watson, however, retains his diffidence; when he understands that Miss Morstan may become a very rich heiress, his confidence falters. They do, though, fall in love and she accepts Watson's proposal.
Holmes often needs Watson as a sounding board for his theories about the case, and Holmes also knows that Watson is much better in dealing with people than he is himself. He tells Watson that he needs his help, and Watson seems to gain confidence as a result.
When the case is solved, Holmes falls back into his same pattern of solitude and drug abuse while Watson becomes less preoccupied with feelings of inferiority and more humanized and developed through his assistance with the case and his romance with Miss Morstan.