Heat olive oil in a medium saucepan over medium heat. Add onions and garlic and cook until soft. Add pureed tomatoes with their juices, crushed tomatoes, tomato paste, 1 cup water, bay leaf, parsley, Cubano pepper, and bring to a boil. Season, to taste, with salt and pepper. Reduce heat and cook until slightly thickened, about 30 minutes. Add Meatballs and let simmer for 10 to 15 minutes, until the sauce has thickened and Meatballs are tender. Remove the bay leaf.
Add enough sauce to the drained pasta (that has been returned to the pot) to coat and continue cooking briefly, just until pasta is well combined with sauce. Serve pasta with Meatballs on top and garnished with fresh basil.
Combine all the ingredients in a medium bowl, except olive oil. Season with salt and pepper. Roll the mixture into 1 1/2-inch balls. Heat the oil in large saute pan over medium-high heat. When oil is hot, fry meatballs, in batches as needed, until golden brown, but not cooked through completely. Remove with a slotted spoon to a plate lined with paper towels.
Bring salted water to a boil in a large pot. Add spaghetti and cook until al dente. Drain well in a colander, return to pot, and toss with sauce. Serve with meatballs and Parmesan on top.