Watts, who is out of contract at the end of the season, is waiting until a clear picture of the club's direction emerges before he makes a decision as to whether he wants to stay.
Craig left no one in any doubt of his opinion of Watts but is respectful of the player's right to take his time.
"I see him as a really important player for the Melbourne footy club. I've really enjoyed the way he has played. He has got great flexibility," Craig said.
"I see Jack Watts as a critical player for our club to keep and I think he can have a very successful and enjoyable career at the Melbourne footy club."
Watts appeared on The Footy Show on the Nine Network on Thursday night and was less than convincing about his desire to stay in Melbourne beyond 2013. However Craig said he did not get too uptight about that sort of analysis.
"I wouldn't have thought Jack would have taken a position where he wanted to be convincing to stay or go because he probably doesn't know, so I don't know how he could be convincing either way," Craig said.
He said it was Watts' right to make a decision that was in his best interests and it was Melbourne's responsibility to do everything it could to impress him enough to keep him.
"[We have to] create an environment where they feel that as players they can be the best player they can be, as well as have a degree of team success. That is our responsibility to do that," Craig said.