Preheat oven to 425 degrees F. Line a baking sheet with foil and lightly oil or coat with nonstick spray.
In a large bowl, combine Parmesan, Panko, parsley, milk, egg, shallot and garlic; season with 1 teaspoon salt and 1/2 teaspoon pepper. Let stand 10 minutes.
Using a wooden spoon or clean hands, add ground beef and ground pork, stirring until well combined. Roll the mixture into 1-to-1-1/2-inch meatballs, forming about 36 meatballs.
Place meatballs in a single layer onto the prepared baking sheet. Place into oven and bake until browned, about 12-15 minutes; set aside.
Heat olive oil in a large stockpot or Dutch oven over medium heat. Add onion, and cook, stirring frequently, until translucent, about 2-3 minutes. Stir in garlic, Italian seasoning, fennel seeds, and crushed red pepper flakes until fragrant, about 1 minute.
Stir in wine, scraping any browned bits from the bottom of the pot.
Stir in tomatoes and sugar; season with salt and pepper, to taste. Bring to a boil; reduce heat and simmer until sauce has thickened, about 20 minutes.
Stir in meatballs; cover and continue to simmer until flavors have blended, about 30 minutes. Stir in basil; season with salt and pepper, to taste.
In a large pot of boiling salted water, cook pasta according to package instructions; drain well.
Serve immediately, topped with meatballs and sauce.
Notes
*Panko is a Japanese-style breadcrumb and can be found in the Asian section of your local grocery store.