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Preheat oven to 400°F. Lightly coat inside of spaghetti squash with cooking spray. Place squash halves, cut sides down, on a 15x10x1-inch baking pan. Bake about 50 minutes or until squash is soft. Let cool slightly. Use a fork to separate the strands of squash.
Meanwhile, for meatballs, place bulgur in a large bowl. Pour the boiling water over bulgur; let stand about 20 minutes or until most of the water is absorbed. Add egg, ground beef, garlic, and 1 teaspoon of the Italian seasoning. Mix to combine. Shape into 1-inch meatballs.
Lightly coat a very large skillet with cooking spray. Preheat skillet over medium-high heat. Add meatballs to hot skillet; cook until browned, turning occasionally to brown evenly. Add tomatoes, sugar, crushed red pepper (to taste), salt and the remaining 2 teaspoons Italian seasoning. Bring to boiling; reduce heat. Simmer, uncovered, for 7 to 10 minutes or until sauce starts to thicken and meatballs are cooked through.
Serve meatballs and sauce over squash. Top with grated Parmesan cheese. If desired, sprinkle with basil.