Preheat Oven and Prepare Baking Dish: Preheat oven to 425 degrees F (218 degrees C). Line a 9x13-inch baking dish with parchment paper, then set aside. (Note: you don't have to use parchment paper, but it does make clean-up a lot easier! If you want to skip it, the recipe will still work.)
Prepare Cream Cheese Mixture: To a large microwave-safe bowl, add cream cheese and heavy cream. Microwave on high for 1-3 minutes, pausing to stir every 20-30 seconds, until cream cheese is melted and mixture can easily be stirred together (it’s OK if it’s not totally smooth). Transfer mixture to a large mixing bowl.
Stir in Spices and Cheese: In a separate small mixing bowl, stir together cumin, garlic powder, paprika, salt, and pepper. Add to mixing bowl of cream cheese and cream, then whisk together.
Stir in Salsa and Chili: Add in 1 ½ cups shredded cheddar cheese, salsa, and chili, then stir or whisk until all ingredients are mixed together. Taste and add more salt and pepper, based on taste preferences.
Transfer to Baking Dish: Pour mixture into baking dish and use a rubber spatula to smooth it into an even layer. Sprinkle remaining ½ cup shredded cheese on top.
Bake: Transfer baking dish to oven and bake for 10-15 minutes, or until dip is bubbly and starts to slightly brown on top. Optionally, turn on oven broiler and broil for 1-2 minutes on the middle oven rack (don't broil on highest oven rack, or the parchment may burn). Watch the dip carefully while it broils to avoid burning. Then, remove dish from oven.
Add Toppings: Garnish with desired toppings, like hot sauce, sliced jalapeños, diced tomatoes, chopped green onions, and chopped cilantro.
Serve: Serve hot with tortilla chips and/or sliced veggies.