Preloading of 'Watch Later' videos has been enabled, but I do not know how to tell when a video I am about to watch has been successfully pre-loaded by the YouTube app. As others have noted (Youtube Preload limit?) there is a limit to how much video Google will download to your device. I cannot see whether a particular video is preloaded or not. I have a good (but limited) mobile network, so preloaded or not pre-loaded both load quickly.
Can you see where the data is stored? Is there a widget or indicator I missed that tells me if the video will come from the storage or from the cell network before launching it?