In a large saucepan, combine the vegetables, onion, bouillon and 2 cups water. Bring to a boil. Reduce heat; cover and simmer for 4-6 minutes or until vegetables are tender.
Stir in the milk, soup, garlic powder and nutmeg. Combine cornstarch and remaining water until smooth; gradually stir into soup. Bring to a boil; cook and stir for 2 minutes or until slightly thickened. Stir in cheese until melted.