Preheat the oven to 375°F. Spray a 9x13-inch baking pan with non-stick spray.
Cook pasta according to directions on the package. However, cook it for 2 minutes less than instructed. Drain, drizzle with olive oil, and toss to prevent from sticking together.
In a large skillet, braiser, or Dutch oven, cook the sausage, onions, and garlic until the meat is no longer pink. Drain fat if needed.
Add the tomato sauce, diced tomatoes, Italian seasoning, sugar, salt, and pepper. Bring to a low boil, then reduce heat to simmer and simmer for 10 minutes.
In a bowl, stir the cream cheese, cottage cheese, 1 cup Parmesan, and 1 cup Mozzarella together.
Add the pasta and 1 cup of tomato sauce to the cream cheese mixture and stir to combine. Take care not to break up the pasta. Pour into your 9x13-inch pan.
Top with the remaining tomato sauce, then 1 cup mozzarella, then the remaining 1/2 cup Parmesan.
Cover with foil and bake for 20 to 25 minutes. Remove the foil (be careful steam will release) and return the dish to the oven for another 20 to 25 minutes.
Carefully remove from the oven. Allow it to cool 10 to 15 minutes before serving. It will be very hot. Top with fresh basil before serving.