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, stirring occasionally, until softened, about 4–5 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, stirring constantly, until the cheese 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 gently toss to combine so the pasta is evenly coated.
Pour the spaghetti mixture into a greased 9x13-inch baking dish, cover with aluminum foil, and bake for 20 minutes.
Remove the foil, sprinkle the shredded cheddar cheese over the top, and return to the oven; bake uncovered for 5 minutes, until the cheese is melted.