Optional Homemade Cranberry Sauce:
Remove ½ cup of cranberries for the dip. In a small saucepan, combine the remaining cranberries, sugar, orange juice, lemon juice, and water.
Cook over medium-low heat, stirring occasionally, until the sugar dissolves and the cranberries start to burst. Some cranberries will remain whole while others break down.
Let the cranberry sauce cool and store any leftovers in an airtight container in the refrigerator.
To Make the Cranberry Cream Cheese Dip:
Preheat the oven to 375°F (190°C) or 350°F (175°C) for convection ovens. Lightly spray a 1 ½-quart baking dish with cooking spray.
In a medium-large mixing bowl, combine the softened cream cheese and 1 ¾ cups of grated cheddar cheese. If desired, stir in the nutmeg to taste (about ⅛ to ½ teaspoon).
Gently fold in the cranberry sauce and the reserved ½ cup of fresh cranberries.
Spoon the cranberry mixture evenly into the prepared baking dish and top with the remaining ¼ cup of grated cheddar cheese.
Bake for 18-23 minutes (or 15 minutes for convection) until bubbly in the middle and golden around the edges. Cover with foil if the top is browning too quickly.
A few minutes before removing from the oven, sprinkle additional cheddar cheese on top and remove the foil to allow the cheese to brown slightly.
Serve warm with crostini, crackers, or pita chips. For an extra touch, grate a little fresh nutmeg over the top before serving.