Heat olive oil in your medium skillet over medium heat until shimmering. Add the finely diced onion and cook for 5-7 minutes until translucent and softened. Stir in minced garlic and cook for another minute until fragrant, being careful not to burn it.
Combine ground beef, Italian sausage, breadcrumbs, Parmesan, parsley, eggs, milk, oregano, basil, salt, and pepper in your large bowl. Add the cooled onion-garlic mixture and gently mix with your hands until just combined, avoiding overmixing which creates tough meatloaf.
Mix ricotta cheese, Parmesan, fresh basil, beaten egg, salt, and pepper in a medium bowl until smooth. Fold in the chopped sun-dried tomatoes and sautéed spinach. This creamy mixture will create the surprise center that makes this dish so special.
Press half the meat mixture into a rectangle on your parchment-lined baking sheet, leaving a one-inch border. Spread the ricotta mixture evenly over the meat base, then layer mozzarella slices on top. Cover with remaining meat mixture and seal edges completely.
Sauté minced garlic in olive oil for 30 seconds until fragrant. Add crushed tomatoes, tomato sauce, water, oregano, basil, sugar, salt, and pepper. Simmer for 15-30 minutes, stirring occasionally, until flavors meld and sauce thickens slightly.
Pour half the tomato sauce over the shaped meatloaf, reserving the rest for serving. Bake at 350°F for 60-75 minutes until internal temperature reaches 160°F. Let rest for 10-15 minutes before slicing to allow juices to redistribute properly.