Reen, mix your cheddar with something that has a milder flavor, but melts better, like Monterrey Jack or gruyere. Use more of the "melty" cheese and then use a very sharp cheddar more as a flavoring than as the main component in the dish.

No, cheddar has great flavor!

Thank you for the great tips! I'm going to try making it tomorrow. also, Should I just stay away from cheddar?

Also, might seem obvious, but make sure you're grating your cheese instead of using cubes.

You do not need to make a roux for your mac and cheese.

You still need to melt the cheese into your dairy, but instead of using a roux, simply coat your shredded cheese with some corn starch, before adding the cheese to the dairy.
This will function the same as a roux with the fat already in the cheese. The cornstarch will thicken the liquid as the cheese melts. When using cornstarch, you do not need to bring the liquid to a boil. You do need to bring the liquid to a boil if using a [flour-based] roux.
Also, the kind of cheese you use absolutely matters. Aged cheeses are likely to make your mac & cheese gritty. Here's a good link about melting cheeses that talks about which are good for melting and which aren't: http://www.finecooking.com/articles/how-to-melt-cheese.aspx

to your second question, no. Make your bechemel, pull it off the heat, then stir in your cheese, then your cooked and drained pasta. Heat until steaming, but not boiling, pour into a casserole dish, top with bread crumbs, and broil until topping is brown and crunchy. If you are going stove top style, check out Alton Browns version. It tastes better than Kraft, but is more similar in texture and appearance than a baked mac and cheese. http://www.foodnetwork.com/recipes/alton-brown/stove-top-mac-n-cheese-recipe/index.html

Do a mix of half sharp cheddar and half colby or monterey jack. Cheddar is not a smooth melting cheese, it tends to separate, but if you add the colby or jack cheese it will be a lot smoother. You will definitely want to do the sauce suggestion previously mentioned as well. Bechemel + cheese = mornay sauce, and is what is typically added to pasta for mac & cheese.

Do I bring it to a boil when I add in the cheese?

You need to make a bechamel sauce. Basically make a roux and then add milk until thick pudding consistency. Then melt cheese into it.

Roux = fat (e.g. butter or oil), heated then add flour and whisk over heat until clumped into a ball onto the whisk. Then add milk (more fat = tastier) whisking on heat, until you get a really thick pudding consistency. Think old time custard or pound cake batter.