Thinly slice the shallots and soak them in cold water for 10 minutes. Drain thoroughly and pat dry with paper towels.
Heat the olive oil in a skillet over medium heat. Add the shallots in a single layer and fry, stirring occasionally, until they become golden brown and crispy, about 5 to 7 minutes. Remove the shallots with a slotted spoon and drain on paper towels. While still warm, season lightly with salt. Set aside.
In the same skillet, melt the butter over medium-low heat. Stir in the flour and cook for about one minute, stirring constantly.
Gradually whisk in the milk, making sure no lumps form. Add the minced garlic, smoked paprika, cumin if using, and salt and pepper to taste. Cook the mixture, stirring frequently, until it thickens slightly, about 2 to 3 minutes.
Reduce heat to medium-low and add the sharp cheddar, Monterey Jack, and softened cream cheese. Stir gently until the cheeses melt together into a smooth, creamy sauce.
Taste and adjust the seasoning if necessary. Sprinkle chopped fresh cilantro on top if desired.
Just before serving, top the queso with the warm, crispy shallots.