Preheat oven to 450 degrees F. Line a baking sheet with parchment paper.
Combine panko and milk in a large bowl, stirring to combine. Let sit for 10 minutes.
Add remaining meatball ingredients to panko mixture including ground turkey, parmesan, grated onion, parsley, garlic, Italian seasoning, salt, pepper, and egg. Form 14 large meatballs and place them prepared baking sheet. Bake for 10 minutes or until browned.
Reduce oven to 325 degrees F.
Make the sun-dried tomato sauce. Heat 2 tablespoons oil in an oven-safe saute pan or Dutch oven over medium heat. Add garlic and saute for 30 seconds or until aromatic. Add remaining sauce ingredients including canned tomatoes, sun-dried tomatoes, red wine, oregano, basil, parsley, fennel, and red chili flakes. Bring to a boil, reduce heat to low, and simmer for 15 minutes. Season the sauce with salt and pepper.
Add meatballs to the sauce and cover the pot. Continue to cook in the oven for 20 minutes or until cooked through. Remove from the oven and sprinkle a generous amount of grated parmesan and fresh basil. Serve immediately.