Cook 1 cup sugar in a 9-inch round cake pan over medium heat, stirring occasionally, 5 minutes or until sugar melts and turns golden brown. Remove pan from heat, and let stand 5 minutes. (Sugar will harden.)
Meanwhile, whisk together egg yolks and next 5 ingredients in a large bowl.
Process egg whites, cream cheese, and remaining 1/2 cup sugar in a blender until smooth. Add 2 cups egg yolk mixture, and process until smooth. Stir egg white mixture into remaining egg yolk mixture until blended. Pour custard over caramelized sugar in pan.
Place cake pan in a large shallow pan. Add hot water to large pan to depth of one-third up sides of cake pan.
Bake at 350° for 50 to 60 minutes or until a knife inserted into center of flan comes out clean. Remove pan from water; cool completely on a wire rack (about 2 hours). Cover and chill 4 hours to 2 days.
Run a knife around edge of flan to loosen; invert onto a serving plate. (Once inverted, the flan will take about 30 seconds to slip from the pan. Be sure to use a serving plate with a lip to catch the extra caramel sauce.)