In a large pot of salted boiling water, cook pasta for 1 minute less than the package suggestion for al dente (about 8 minutes). Drain and toss with a drizzle of olive oil to prevent sticking.
While the pasta boils, melt butter in a large Dutch oven (about 6-7 quarts) over medium heat. Add flour; cook, whisking constantly, for 1 minute. Very gradually, whisk in the milk and half-and-half. Bring to a boil over medium heat, whisking constantly. Remove from the heat.
Whisk in the Worcestershire sauce. Gradually add all of the Velveeta cheese and half of the cheddar cheese (1 ½ cups). Stir until the cheese is completely melted and smooth. Stir in the salt, dry mustard, pepper and nutmeg. Add cooked, drained pasta and stir to coat.
Transfer to the prepared baking dish. Sprinkle remaining 1 ½ cups of grated cheddar on top. Bake for 15 minutes, or until cheese is melted on top and the sauce is bubbly.
For a crispier, browner top, pop the dish under the broiler for 2-5 minutes.
