"Original recipe that has remained the same for many years and has been declared as a Family Tradition. I am not sure about times because we used to know when it was ready by looking at the color of the salsa (sauce). It needs to be more orange than red or pink. It has to boil inside. Serve with bread and enjoy."
Bring a large pot of lightly salted water to a boil. Stir olive oil and basil leaves into the boiling water; cook spaghetti, stirring occasionally, until cooked through but firm to the bite, about 12 minutes. Drain.
Grease a large casserole dish with 2 teaspoons butter. Loosely pile about 1/3 of the spaghetti into the casserole dish; do not pack. Dot spaghetti with about 1/3 of the garlic herb butter.
Combine evaporated milk, American cheese, red bell peppers, and salt in a blender, working in batches if necessary; blend until smooth.
Sprinkle spaghetti in the dish with 1/3 the Monterey Jack cheese and pour 1/3 the blended American cheese sauce over the top. Layer 1/3 the remaining spaghetti, 1/3 the garlic herb butter, 1/3 the Monterey Cheese, and 1/3 the sauce twice more. Cover dish with aluminum foil.
Bake in the preheated oven until the dish is bubbling and the sauce has darkened slightly from pink to orange, about 30 minutes.