I use reduced-fat cheddar cheese in almost all of my recipes. Part of the reason I do this is because of the reduced fat and calories, but I also have found that these cheeses melt better. You can try this for yourself. Melt an ounce of 2% milk cheese on one slice of toast and an ounce of regular cheddar on another. The full fat cheddar will separate, with much of the fat turning to a greasy oil, while the reduced fat version will not.
Kraft® makes a consistently good reduced-fat cheddar that is marketed under the Cracker Barrel® brand. It is labeled “made with 2% milk, Reduced Fat.”