Squeeze as much liquid as possible from the spinach.
Melt butter in a heavy-bottomed sauté pan over medium heat. Add onions and sauté until translucent but not browned -- about 15 minutes. Add the nutmeg, salt and pepper. Cook for about 2 more minutes.
Mix cornstarch with about ¼ cup of cold milk.
Add rest of milk and heavy cream to onion mixture and cook until hot -- about 5 minutes. Add the cornstarch and milk mixture and cook until sauce has thickened. Add spinach and ½ cup Parmesan cheese to the cream mixture. Mix well.
Transfer the spinach to a 9-inch square or round baking dish. Top with remaining cheeses. Bake for 20 minutes or until hot and bubbly.
Can be made ahead up to point where the dish goes into the oven – just cover with plastic wrap and refrigerate. Let dish come to room temperature before final cooking.