Combine gelatin and boiling water in a medium heatproof bowl. Stir until dissolved, about 2 minutes. Add cold water and mix well. Place in the refrigerator and chill until partially set, about 1 hour
Add watermelon, undrained pineapple, and 1 cup pecans to the gelatin and mix well. Spoon into a salad bowl. Place back in the refrigerator and chill until set, about 1 hour.
Place cream cheese in a medium bowl. Beat using an electric mixer on high speed until light and fluffy.
Add milk and sugar to cream cheese and continue beating until the mixture is smooth. Fold in whipped topping. Spread mixture over the gelatin and sprinkle remaining pecans on top. Chill until ready to serve.
