Preheat oven to 350°F (175°C). Spray a 9x13-inch baking dish with non-stick cooking spray or lightly grease with butter. Set aside.
Bring a large pot of salted water to a boil. Break spaghetti in half if desired and cook until al dente, about 2 minutes less than package directions (usually 8-9 minutes). Drain in a colander and set aside; do not rinse.
While pasta cooks, heat olive oil in a medium skillet over medium heat. Add diced onion and bell pepper. Sauté 5-7 minutes until soft and translucent. Remove from heat.
In a large mixing bowl, whisk together cream of mushroom soup, cream of chicken soup, chicken broth, and sour cream until smooth. Add garlic powder, seasoned salt, black pepper, cayenne pepper (if using), and undrained Rotel tomatoes. Mix until combined.
Add sautéed vegetables, cooked shredded chicken, and 1 1/2 cups of shredded cheddar cheese to the sauce mixture. Mix until evenly distributed.
Add drained spaghetti to the mixture and gently fold until every strand is coated. If mixture seems too thick, add an additional 1/4 to 1/2 cup chicken broth.
Pour the spaghetti mixture into the prepared 9x13-inch baking dish and spread evenly. Sprinkle remaining 1 cup of shredded cheddar cheese over the top.
Cover tightly with aluminum foil and bake for 30 minutes. Remove foil and bake uncovered for an additional 15-20 minutes until hot, bubbly around the edges, and cheese is melted and golden.
Remove from oven and let rest for 5-10 minutes before serving. Garnish with chopped fresh parsley if desired. Serve hot.