Thanks for posting your recipe - I'd say that 2 cups is what is required for this breakfast casserole. And yes, the extra cooking time was due to it being in the refrigerator. As far as the onion, you might want to saute a little before adding to the casserole - that will help dull that raw onion flavor (I don't like that either). "Small" onion is so hard to define but sauteing should help.
"Count yourself...you ain't so many" - quote from Buck's Daddy