Preheat the oven to 375 F. Lightly grease an 11x7 inch or 2-quart baking dish with cooking spray. Bring 3 quarts water to a boil in a stockpot or large saucepan. Add both packages of the gnocchi and ¼ cup of the kosher salt. Boil about 3 minutes or until the gnocchi float.

Melt butter in a large saucepan over medium. Add the shallots, and sauté 30 seconds or until fragrant. Add the flour and chopped thyme, and cook, stirring constantly, 2 to 3 minutes or until mixture is golden brown. Gradually whisk in the milk. Increase heat to high.

Bring mixture to a boil, whisking occasionally. Reduce heat to medium-low, and simmer, whisking constantly, 5 minutes or until slightly thickened and mixture coats the back of a spoon. Stir in mustard and hot sauce. Remove from heat.

Add the sharp and extra-sharp Cheddar cheeses, and stir until melted. Stir in the gnocchi and remaining 2 ½ tsp salt, and transfer to the prepared baking dish.

Bake at 375 F for 25 minutes or until the gnocchi is puffed and sauce is golden and bubbly. Increase the oven temperature to broil, and broil 2 minutes or until the top is slightly browned. Let stand 5 minutes, and serve immediately.