Soak the cashews. You can either do a "quick soak" or soak the cashews for several hours or overnight. To quick soak, boil water on the stovetop, cover the cashews with the boiling water and set aside for 10-15 minutes. Drain (but Keep 1.5 C of warm water to the side to add back into blender)
In a blender (high powered preferred, a food processor will also work), add the cashews, lemon juice, 1.5 cups of the water, nutritional yeast, smoked paprika, garlic powder, onion powder, chili powder, and the salt.
If you want it warmer - add the cheese sauce from the blender back into sauce pan. Using a whisk, warm over medium heat, whisking constantly, until it begins to bubble and thicken. Add water slowly as needed, depending on how thick or thin you want the sauce to be.
Add salt to taste. If the cheese sauce sits for a while, or you refrigerate the leftovers, it will thicken. Simply warm it again on the stove, adding water as needed to thin. Sauce will last for 5 days in the refrigerator.