Preheat your oven to 350°F (175°C).

In a large mixing bowl, combine ground beef, finely diced onion, breadcrumbs, one egg, ¼ cup milk, and a generous pinch of salt and pepper. Mix until just combined and press evenly into a greased 9x13-inch baking dish.

Place the meatloaf into your preheated oven and bake for 20 minutes.

While the meatloaf bakes, cook the macaroni according to package instructions until al dente. Drain and set aside.

In a medium saucepan, melt 2 tablespoons of butter. Stir in 2 tablespoons of flour and cook for about one minute until bubbly. Gradually whisk in 2 cups of milk and stir until thickened. Remove from heat and incorporate salt, pepper, paprika, and 1.5 cups of shredded cheddar cheese until creamy.

Add the cooked macaroni to the cheese sauce, stirring until well-coated. Spread the macaroni mixture over the partially baked meatloaf in the dish.

Sprinkle the remaining half cup of shredded cheddar cheese over the macaroni layer.

Return the casserole to the oven and bake for an additional 25 minutes until the cheese is melted and bubbling. Let cool for a few minutes before slicing.