Preheat oven to 400°F and line a large baking sheet with parchment paper. In a small bowl, mix the panko breadcrumbs with milk and let sit for 5–10 minutes to absorb. While the breadcrumbs soak, finely chop the onion, mince the garlic, and grate fresh Parmesan cheese.
In a large mixing bowl, combine ground beef, the panko mixture, onion, garlic, egg, Parmesan, ricotta, Italian seasoning, salt, and pepper. Mix with your hands until evenly combined.
Form the mixture into 12 golf ball-sized meatballs and place them on the prepared baking sheet. Bake for 20 minutes, until cooked through and lightly browned.
While the meatballs bake, make the marinara sauce. In a skillet, sauté onion and garlic in olive oil over medium heat for 5 minutes. Stir in tomato paste, then add crushed tomatoes, Italian seasoning, sugar, salt, pepper, and red pepper flakes. Simmer for 10 minutes, stirring occasionally.
Increase oven temperature to 500°F. Transfer the marinara sauce to an oven-safe dish and nestle the baked meatballs into the sauce. Top with extra ricotta if desired and bake for 5 minutes until bubbly. Serve warm over pasta and enjoy!