Place the 4 cups of yellow squashes (sliced) and 1/2 cup of onion (chopped) in the large skillet on the stove top and heat over medium heat. Add the 1/2 cup of water and cover. Cook for about 5 minutes: until squash is tender.
When the 4 cups of yellow squashes (sliced) is your desired texture, drain the 1/2 cup of water from the large skillet. A colander (optional) can help a lot here. Then, place your vegetables into the large bowl .
Crush the 35 buttery crackers (crushed) into the medium bowl and mix in the 1 cup of cheddar cheese (shredded) . Then, stir half of that mixture in with the cooked yellow squashes.
On the stove top, melt your butter. In the meantime, mix together the 2 eggs (beaten) and 3/4 cups of milk in the small bowl: add to the yellow squashes mixture. Stir in the 2 tablespoons of butter (saving a small amount for the last step), and season with the 1 teaspoon of salt and 1 dash of ground black pepper.
Spread the squash mixture into the 9″ x 13″ pan, and sprinkle the rest of the cracker mixture over the top of it, and dot with your remaining butter.
Bake in the oven for around 25 minutes until lightly browned.