Preheat oven to 400°F. Spray a broiler pan or a large baking pan fitted with a rack with cooking spray. Set aside.
To a large bowl add ground beef and sausage, onion, panko, Parmesan cheese, Italian seasoning, salt, garlic and red pepper flakes. Beat milk and eggs together then, add to the bowl. Using your hands, mix everything together thoroughly.
Form into 1 1/2 - 2 inch meatballs and place onto the rack without touching. (I use a 2 oz ice cream scoop to keep meatballs uniform in size) Bake for 25 minutes.
While meatballs bake, in a large pot on the stovetop, heat a couple of drizzles of oil over medium-high heat. Add onion, and simmer for 1-2 minutes or just until translucent. Add garlic, saute for 1 minute longer.
Add tomatoes, tomato paste, dry Italian seasoning, salt, pepper and sugar. Cover and bring to a gentle simmer on medium low heat while the meatballs bake.
Add cooked meatballs to sauce, gently stir to coat. Simmer over medium low uncovered for 5 minutes or while you boil spaghetti.
Serve meatballs over cooked spaghetti, garnished with fresh parsley and additional Parmesan cheese or mozzarella cheese.