Preheat your oven to 375°F (190°C). Lightly grease a 2-quart baking dish (approximately 8x8 inches or a similar size) with butter or cooking spray. This prepares the dish for an easy release and even baking, preventing sticking.

If using fresh broccoli, bring a large pot of lightly salted water to a rolling boil over high heat. Add the broccoli florets and cook for just 1-2 minutes until they are bright green and slightly tender-crisp (al dente). Why this step is crucial: We want to pre-cook the broccoli just enough so it's not raw, but still has a slight bite, preventing a mushy texture in the final casserole. For frozen broccoli, ensure it's fully thawed and gently squeeze out any excess moisture with paper towels.

Immediately drain the blanched broccoli and transfer it to a large bowl of ice water. Let it cool for 2-3 minutes, then drain thoroughly. Pro Tip: The ice bath stops the cooking process instantly, preserving the broccoli's vibrant green color and tender-crisp texture. Ensure the broccoli is as dry as possible to prevent a watery casserole; pat it down with a clean kitchen towel or paper towels.

In a medium saucepan or Dutch oven, melt 2 tablespoons of unsalted butter over medium heat. Add the finely minced shallot (or onion) and cook for 2-3 minutes, stirring occasionally, until softened and translucent. Why this matters: Cooking the aromatics gently builds a foundational layer of savory flavor for your cheese sauce.

Sprinkle the 2 tablespoons of all-purpose flour over the softened shallots and stir constantly for 1 minute. Add the smoked paprika, garlic powder, and a pinch of nutmeg (if using). Continue cooking and stirring for another 1-2 minutes. The 'why': This creates a roux, a classic thickening agent. Cooking the flour sufficiently eliminates any raw flour taste, ensuring a smooth, nutty base for your sauce.

Gradually whisk in the slightly warmed whole milk, a little at a time, incorporating it fully before adding more. Continue whisking constantly over medium heat for 3-5 minutes until the sauce thickens to a consistency that coats the back of a spoon. Visual Cue: The sauce should be smooth and velvety, resembling a thin gravy. Warming the milk slightly helps prevent lumps.

Reduce the heat to low. Add 1 ½ cups of the freshly shredded sharp cheddar cheese and the softened cream cheese to the sauce, stirring until both are completely melted and the sauce is smooth. Stir in the Dijon mustard if using. Season generously with salt and freshly ground black pepper to taste. Pro Tip: Always add cheese off the direct heat or on low to prevent it from seizing or becoming grainy. Freshly shredded cheese melts much better than pre-shredded varieties.

Add the thoroughly dried blanched broccoli florets to the cheese sauce. Gently toss everything together until the broccoli is evenly coated in the rich, creamy sauce. Pour the cheesy broccoli mixture into your prepared baking dish, spreading it into an even layer.

Evenly sprinkle the remaining ½ cup of shredded sharp cheddar cheese over the broccoli mixture. Then, scatter the crushed buttery crackers (or prepared panko mixture) over the top. Achieving the perfect topping: This layering ensures a beautiful golden crust and extra cheesiness. Bake for 25-30 minutes, or until the casserole is bubbly around the edges and the topping is golden brown and crispy.

Remove the casserole from the oven and let it rest for 5-10 minutes before serving. This allows the sauce to set slightly and become even creamier. Garnish with fresh chopped parsley for a beautiful pop of color and freshness. Enjoy this ultimate comforting side dish!