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Preheat oven to 350°F. Stir sugar and water in heavy medium saucepan until slightly dissolved. Cook on medium heat, without stirring, 8 to 10 minutes or until sugar turns golden brown. Immediately pour into 8 (6-ounce) custard cups or ramekins. Wearing oven mitts, quickly swirl and tilt each custard cup to coat bottom and some of the sides with caramelized sugar. Place custard cups in large shallow baking pan. Let caramelized sugar stand at room temperature to cool and harden slightly
Place milks, cream cheese, eggs, vanilla and spices in blender container; cover. Blend on medium speed until smooth. Divide evenly among prepared custard cups. Cover the top of each cup with foil. Pour enough hot water into baking pan to come halfway up sides of custard cups
Bake 40 to 45 minutes or until knife inserted in center of flan come out clean. Carefully remove custard cups from pan. Cool on wire rack
Refrigerate 3 hours or overnight. Carefully run knife around flan to loosen from custard cups. Invert onto individual dessert plates. Gently remove cups