Cook the Noodles: Bring a large pot of salted water to a boil. Cook egg noodles for 5-7 minutes until al dente (they'll soften more in the sauce). Drain well and set aside.
Make the Roux: In a medium saucepan, melt butter over medium heat. Whisk in flour and cook for 1-2 minutes, stirring constantly, until it turns light golden and smells nutty. This is your roux - the base of the sauce.
Add the Milk: Slowly pour in warmed milk, whisking constantly to prevent lumps. Using warm (not cold) milk is the key to a smooth sauce. Simmer for 3-4 minutes until the sauce thickens and coats the back of a spoon.
Melt in the Cheese: Remove from heat. Stir in both cheddars, dry mustard, paprika, garlic powder, cayenne, salt, and pepper. Stir until the cheese melts completely into a smooth, creamy sauce.
Combine: Add the drained egg noodles to the cheese sauce. Fold gently until every noodle is coated. Serve immediately for a stovetop version.
Optional Bake: For a baked version, transfer to a greased 9x13-inch dish. Mix panko with melted butter and scatter over the top with extra cheese. Bake at 350°F for 15-20 minutes until golden and bubbly.
