Holy cow, I wrote a book!
Early beta versions of the taskbar clock did display seconds, and it even blinked
the colon like some clocks do. But we had to remove it.
Because that blinking colon and the constantly-updating time were killing our benchmark
On machines with only 4MB of memory (which was the minimum memory requirement for
Windows 95), saving even 4K of memory had a perceptible impact on benchmarks. By blinking
the clock every second, this prevented not only the codepaths related to text rendering
from ever being paged out, it also prevented the taskbar's window procedure from being
paged out, plus the memory for stacks and data, plus all the context structures related
to the Explorer process. Add up all the memory that was being forced continuously
present, and you had significantly more than 4K.