Melt butter in a large skillet over medium heat.
Sauté onion and jalapeño until softened and glossy, about 3 to 4 minutes.
Stir in garlic and cook until fragrant, about 30 seconds.
Add corn and cook, stirring occasionally, for 3 minutes to heat through.
Pour in heavy cream and milk; bring to a gentle simmer.
Mix in cream cheese and stir until the sauce is smooth and creamy.
Whisk cornstarch with water, then stir the slurry into the skillet; simmer until thickened, 2 to 3 minutes.
Season with salt, pepper, smoked paprika, and sugar to taste. Finish with lime juice if using.
Scatter chives or cilantro over the top and serve warm.