Add the freshly cooked and drained macaroni into the casserole along with the sliced hot dogs and just 2 cups of the cheese; mix well.
Combine butter and onion in a medium saucepan and saute over medium heat until the onion is wilted (about 5 minutes).
Whisk flour into the butter mixture quickly until flour is absorbed, then remove from heat.
Add milk slowly, whisking to combine well- make sure you whisk very quickly and thoroughly or you will have doughy clumps.
Return to heat, whisk in the salt and pepper, and bring to a boil (still whisking)- just be careful not to let it burn.
As soon as it starts to hit the boiling point, remove from heat and pour evenly over the macaroni mixture.
Stir to gently to combine.
Sprinkle with remaining 1/4 cup cheese and bake, uncovered, for 18-20 minutes or until heated through and the cheese has melted and browned (If you prepare this in advance, wait to add the remaining cheese until you are ready to bake the casserole the next day).
For variety, I have tried other types of cheeses and thought Cheddar blended with Monterey Jack was also very nice in this.