Combine shells, 3 cups water and salt in a 5-quart Dutch oven. Bring to a boil, reduce to a steady simmer and cook uncovered for 10 to 12 minutes, stirring frequently so shells do not stick together.
Add reserved water in 2-tablespoon increments if the bottom becomes dry before the shells are nearly tender. Leave about 1/4 cup starchy liquid in the pot rather than draining it.
Stir in evaporated milk and simmer gently for 2 to 3 minutes until the shells are tender and the liquid lightly coats them.
Remove from the heat. Stir in American cheese, then cheddar in 3 additions, followed by mustard and pepper, until smooth.
Rest for 2 minutes and stir again. Loosen with any unused measured water a tablespoon at a time if needed, then serve immediately in 4 bowls.