Process chicken and garlic clove in a food processor until ground.
Stir together chicken mixture, egg, and next 2 ingredients in a large bowl. Cover and chill 20 minutes.
Shape mixture into 1-inch balls. Place a rack coated with cooking spray in an aluminum foil-lined broiling pan. Arrange meatballs on rack; lightly spray meatballs with cooking spray.
Bake at 375° for 13 minutes or until golden and thoroughly cooked.
Sauté mushrooms and nutmeg in hot oil in a Dutch oven over medium-high heat 8 to 10 minutes or until mushrooms are tender. Add minced garlic; sauté 1 minute. Sprinkle with flour; cook, stirring constantly, 1 minute. Add wine, stirring to loosen browned particles from bottom of pan. Whisk in broth. Bring to a boil; reduce heat, and simmer, stirring occasionally, 15 minutes. Add cream cheese, whisking until smooth and sauce is thickened.
Add meatballs, red pepper, and parsley to sauce; simmer 10 minutes. Meanwhile, cook pasta according to package directions omitting salt and oil; drain. Serve sauce with meatballs over pasta.