Heat a dutch oven or large pot over medium-high heat. Once heated, add 3 tablespoons olive oil.
Add diced onion to the pot and cook, stirring occasionally for about 5 minutes. Add minced garlic and cook for another 1 to 2 minutes, careful not to burn.
To the pot, add crushed tomatoes and diced tomatoes, and reduce heat to medium.
Drain liquid from the red bell peppers, and slice into thin strips. Add to the pot with the other ingredients, along with 2 tablespoons tomato paste, fresh basil, dried parsley, salt, pepper and red pepper flakes (if using).
Bring to a simmer, reduce heat to low and let cook for about 15 minutes.
Carefully pour ingredients into the jar of a blender and pulse until mostly smooth. Alternatively, use an immersion blender and pulse in the pot, until sauce becomes the desired consistency.
Add meatless meatballs to the sauce at this point, or continue cooking until sauce has thickened, at least 10 more minutes.