Preheat the oven to 400°F (200°C). Line a baking sheet with parchment paper.
In a large bowl, combine the ground beef, breadcrumbs, grated Parmesan cheese, egg, minced garlic, chopped fresh parsley, dried Italian seasoning, 1/2 teaspoon salt, and 1/4 teaspoon black pepper. Mix gently until just combined.
Shape the mixture into 1 1/2-inch meatballs and place them evenly spaced on the prepared baking sheet.
Bake the meatballs in the preheated oven for 15 to 18 minutes, or until cooked through and browned.
While the meatballs bake, heat the olive oil in a large saucepan over medium heat.
Add the crushed tomatoes, tomato sauce, granulated sugar, 1/2 teaspoon salt, 1/4 teaspoon black pepper, dried basil, and dried oregano to the saucepan. Stir to combine.
Bring the sauce to a simmer, then reduce the heat to low and cook for 10 minutes, stirring occasionally.
Carefully add the baked meatballs to the tomato sauce. Simmer gently for an additional 10 minutes to allow flavors to meld.
Meanwhile, bring a large pot of salted water to a boil. Cook the spaghetti according to package instructions until al dente.
Drain the pasta and return it to the pot.
To serve, divide the cooked pasta among plates, spoon the meatballs and tomato sauce over the pasta, and garnish with chopped fresh basil and grated Parmesan cheese.