Fill a large stockpot with 4 to 5 quarts (4 to 5 liters) of water and add 1 tablespoon of salt. Bring to a full rolling boil over high heat.
Add the 16 oz (450g) elbow macaroni to the boiling water, stir immediately, and cook for 7 to 9 minutes until al dente, stirring occasionally. Before draining, reserve 1/2 cup (120ml) of pasta water, then drain the pasta without rinsing.
While the pasta cooks, cut the Velveeta block into 1-inch (2.5cm) cubes and set aside. Using a box grater, freshly shred the 8 oz (225g) block of sharp cheddar and set aside.
Place a large saucepan over medium heat and melt the 2 tablespoons of butter, then pour in the 1 cup (240ml) of whole milk. Heat until the mixture is steaming and tiny bubbles form at the edges, but do not allow it to boil.
Add the Velveeta cubes to the warm milk mixture and stir constantly until fully melted, then stir in the garlic powder, onion powder, smoked paprika, and dry mustard powder. Reduce heat to low and add the shredded cheddar a handful at a time, stirring between each addition until completely smooth and creamy.
Add the drained elbow macaroni to the cheese sauce and stir until every piece of pasta is evenly coated. If the sauce is too thick, add reserved pasta water 2 tablespoons at a time until you reach your desired consistency.
Taste and adjust seasoning with salt and black pepper as needed. Serve immediately while the sauce is at its creamiest, optionally topped with a pinch of smoked paprika or extra shredded cheddar.