It's very easy to make American cheese at home, and it happens to make the very best macaroni and cheese. As you say, mix some other cheese with sodium citrate dissolved in water. Cheddar works great. You'll get a nacho-sauce-like goop that you can pour onto your pasta (cavatappi or fusilli are best). Add in a caramelized onion and you'll never want to eat boxed mac & cheese again.

Yes.

A good way to think about American Cheese is to consider if instead of it being a mass produced, highly available product, it was made by Thomas Keller and served in a dish at The French Laundry. Then we would call it “molecular gastronomy” and it would be a nice littler touch to some dish.