I've tinkered with it but past a certain point the consistency gets weird in my experience. Maybe it's my combo of cheeses or something. I honestly think it's the milk that fucks with the flavor moreso than the flour and butter. You can get it tasting alright but once you try to get it at the right thickness by adding more milk the taste just goes to hell

Nope. They almost all have real cheese. Usually a mild cheddar. It's then melted with sodium citrate and pasteurized for a longer shelf life (while still being creamy and tender)

It tastes slightly more tart than straight cheddar, but that's it. Well, slightly more tart than a mild cheddar. A sharp cheddar is just as tart, but it's a slight difference in flavor.

Potentially information bleed over. You can use some American Singles cheese to smooth out cheeses in other dishes because it contains emulsifiers (I think, or another compound), but Nacho Cheese is a specific kind of cheese that should be free of American cheese byproduct

It's just a form of citric acid -- if you put lemon juice or wine in (which a lot of recipes, including the one my swiss grandfather uses, do) then you get the same result.