Line 2 baking sheets with parchment paper. Grate cheddar on the larger holes of a box grater. Place cheddar and parmesan cheese in bowl. Slice chives and add to bowl. Add flour, salt, sugar, pinch of cayenne and optional pinch of smoked paprika. Combine ingredients, mixing well. Add cream cheese (cut in small pieces.) Using a spoon or your hands, mix pieces into flour mixture. Knead dough until combined. Transfer to zip lock bag and seal well, pressing all air out. While in the bag, roll into a log on a hard surface. Freeze dough until very firm but not yet frozen, 15–20 minutes. Meanwhile, preheat oven to 350 degrees. When dough has hardened, cut open bag with a knife and remove dough. Sprinkle poppy seeds a shallow plate or baking sheet. Roll dough over poppy seeds, pressing into dough, until log is completely and evenly coated. Discard any poppy seeds that don’t stick. Using a sharp knife quickly slice log in thin wheels, about ¼”–⅛” thickness. Rotate log every few slices to keep bottom side from flattening out. Transfer rounds to prepared baking sheets, spacing about 1″ apart. Bake crackers until tops and edges are golden, 25–30 minutes. Let cool completely. Crackers will become crisp as they cool.