Preheat the oven to 350°F (175°C).
Melt the butter in a large nonstick skillet over medium heat.
Add the chopped sweet onion and cook until softened, about 4 to 5 minutes.
Stir in the seasoned salt, garlic powder, condensed cream of chicken soup, Rotel tomatoes with green chilies, cubed pasteurized cheese product, and milk; cook over medium-low heat, stirring constantly, until the cheese product is melted and the sauce is smooth.
Fold the chopped cooked chicken into the sauce and season with black pepper to taste.
Add the cooked spaghetti to the skillet and toss gently to coat evenly with the sauce.
Transfer the mixture to a greased 9x13-inch casserole dish, cover with foil, and bake for 20 minutes.
Remove the foil, sprinkle the shredded cheddar cheese over the top, and bake uncovered for 5 more minutes until the cheese is melted.
Let the casserole rest a few minutes before serving.