Nacho cheese is a misnomer. Nacho cheese is not a cheese in the sense of Swiss or mozzarella. As mentioned in this article, cheddar can be used to create a sauce for nachos, but so can other cheeses. For clarity, nacho cheese sauce is simply the cheese dip made for nachos. Commercially, it is usually processed "American cheese" made into a liquid honey like consistency by processing it adding salt and whipping it up with emulsifiers (and if you like whey protein, so dental floss is on the right track thinning with milk for a more healthy home-made nacho cheese dip).
Doritos actually do add processed, dried cheddar powder after it is emulsified, but any cheese can be used with great results. This is why Velveeta works well, and why it is the most common base for commercial nacho cheese dips. Velveeta is based on real cheese. The only reason it got into a naming scandal is because of the added milk protein (whey protein) isn't considered for a cheese spread, but it is fine as a cheese product. These distinctions are really just confusing, as they are all milk based products. Some are just cheesier and some just run more.