Combine corn and 1 cup milk in container of an electric blender; process until smooth. Set aside.
Sauté onion in butter in a large Dutch oven until tender. Add flour; cook 1 minute, stir ring constantly. Gradually add remaining milk; cook over medium heat, stirring constantly, until thickened and bubbly. Stir in salt and pepper. Gradually add reserved corn mixture, stirring well. Continue to cook, uncovered, over medium heat until thoroughly heated. Ladle into individual soup bowls; sprinkle with paprika, and serve immediately.