Remove the lid from a 6-quart Instant Pot. Press Sauté. When the word “Hot” appears, swirl in oil. Add onion, and cook, stirring constantly, 5 minutes.
Add rice; cook, stirring constantly, 1 minute or until rice is coated with oil.
Add 1⁄2 cup of the water, salt, and pepper. Cook, stirring constantly, until water is absorbed. Stir in remaining 1⁄2 cup water, squash, and broth.
Close and lock the lid of the Instant Pot. Turn the steam release handle to “Sealing” position. Press Rice, and cook at Low Pressure 12 minutes.
When time is up, open the cooker using Quick Pressure Release. Turn cooker off.
Add cheese, butter, and parsley, stirring until creamy. Serve immediately.