Preheat oven to 400°.
To prepare meatballs, place bread in a food processor; pulse 10 times or until fine crumbs measure 1/2 cup. Combine breadcrumbs, 1/3 cup onion, and next 8 ingredients (1/3 cup onion through turkey); stir well to combine. Lightly coat hands with cooking spray. Shape turkey mixture into 20 (1-inch) meatballs. Place on a baking sheet coated with cooking spray. Bake at 400° for 12 minutes or until done; cover and keep warm.
To prepare sauce, heat oil in a large nonstick skillet over medium-high heat. Add 3/4 cup onion; sauté 3 minutes. Add garlic; sauté 1 minute. Add bell peppers and 1/4 teaspoon salt; sauté 2 minutes. Add tomato and next 6 ingredients (tomato through black pepper); bring to a boil. Reduce heat; simmer, uncovered, 13 minutes or until sauce thickens. Stir in basil and 1/4 teaspoon salt. Add meatballs; stir to coat.
To prepare pasta, while sauce cooks, bring 3 quarts of water to a boil in a large saucepan; add 1/8 teaspoon salt and pasta. Cook 10 minutes or until al dente; drain. Serve meatball mixture over pasta.