In a medium bowl, whisk together the instant vanilla pudding mix and 1.5 cups of cold milk vigorously for about 2 minutes until the mixture thickens and becomes smooth. Set this creamy base aside.

In a large mixing bowl, use an electric mixer to beat 8 ounces of room temperature cream cheese on medium speed until smooth, about 2-3 minutes.

Gradually add in ½ cup of powdered sugar while mixing on low speed. Once incorporated, pour in the previously prepared pudding mixture and beat until thoroughly combined and fluffy, about 1-2 minutes.

Add a few drops of green gel food coloring to the mixture and mix until uniformly colored. Adjust the color to your desired shade of Grinch green.

Gently fold in 3-4 cups of miniature marshmallows using a spatula until they're evenly distributed throughout the mixture.

Transfer the entire mixture to a large serving bowl, cover with plastic wrap, and chill in the refrigerator for at least 2 hours, ideally up to 24 hours.

Right before serving, remove the fluff from the refrigerator, dollop extra Cool Whip on top, sprinkle with red and green sprinkles, and add maraschino cherries.