Preheat oven to 375˚F (190˚C) and grease a 9x13 inch (23 x 33 centimeter) deep baking dish with olive oil.
Fill a large pot with salted water and bring to a boil.
Add the pasta and cook until it begins to soften, but not yet tender, about 5 minutes. Drain and set aside.
While the pasta is cooking, drizzle 2 tablespoons (30 milliliters) olive oil over medium heat.
Add the diced red onion and cook, stirring occasionally, until starting to soften.
Add the minced garlic and cook just until fragrant, 30 seconds to 1 minute.
Crumble the chorizo into the pan. Cook the chorizo while stirring and breaking into small pieces with a spoon.
Once browned, stir in the flour until well coated.
Slowly pour in the chicken stock, while stirring and scraping any browned bits from the bottom of the pan.
Pour in the milk and continue to stir until the mixture is heated through and thickened.
Remove the pot from heat. Once the mixture is no longer bubbling, slowly stir in the shredded Cheddar and Monterey Jack cheese until melted.
Season with the salt, paprika, and black pepper. Adjust seasonings to taste.
Add the cooked pasta and gently toss to coat thoroughly.
Pour the cheese coated pasta into the prepared baking dish. Top with panko mixture and bake in the preheated oven until the panko is golden brown and the cheese is bubbly, 30-45 minutes.
Allow the Chorizo Mac and Cheese to rest at room temperature for at least 10 minutes before serving.