Prepare the Pomegranate Seeds. Cut the pomegranate in half and gently remove the seeds (arils). To avoid a mess, do this in a bowl of water—the seeds will sink while the white membrane floats. Strain and pat the seeds dry with a paper towel.
Mix the Cheese Mixture. In a large mixing bowl, combine the cream cheese, Mexican-blend cheese, smoked paprika, oregano, chili powder, and garlic powder. Season with salt and black pepper to taste. Mix thoroughly until all the ingredients are well incorporated.
Shape the Cheese Ball. Using your hands (wear gloves if needed), shape the cheese mixture into a ball. Transfer the cheese ball to a serving plate and refrigerate for 5-10 minutes to let it firm up slightly.
Coat with Pomegranate Arils. Once firm, remove the cheese ball from the fridge. Gently press the pomegranate arils onto the surface of the cheese ball until it is fully coated, creating a festive, jewel-like exterior.
Decorate the Ornament. Place the wrapped Rolo candy on top of the cheese ball, pressing down lightly to secure it. Break off a piece of the pretzel to create a rounded hook shape, and insert it into the Rolo to resemble the hanger of a Christmas ornament.
Serve. Transfer the completed ornament cheese ball to a serving platter. Serve immediately with crackers, breadsticks, or fresh veggies.