In a skillet over medium heat, heat the 2 tablespoons of olive oil. Once hot, add the thinly sliced yellow onion. Cook the onions, stirring occasionally, for about 15-20 minutes until they are deeply caramelized and golden brown.
While the onions are caramelizing, preheat your oven to 375°F (190°C). Halve the baby sweet peppers and remove the seeds. Arrange them cut-side up on a baking sheet lined with parchment paper.
In a mixing bowl, combine the softened cream cheese, minced garlic, Italian seasoning, sea salt, and the caramelized onions. Mix everything together until smooth and well blended.
Spoon the cream cheese mixture into each halved pepper, generously filling them to the top.
Place the stuffed peppers in the preheated oven and bake for 15-20 minutes, or until the peppers are tender and the filling is warmed through.
Remove the stuffed peppers from the oven and let them cool slightly before serving. These Caramelized Onion and Cream Cheese Stuffed Peppers are best enjoyed warm but can also be savored at room temperature.