Preheat oven to 350 degrees F. As it heats, spritz cooking spray (or use butter) to grease the bottom and sides of the cups of a muffin tin.
In a large mixing bowl, combine milk, egg and Parm. Beat with a fork to break up the egg and really mix it all together. Use tongs to add in the cooked spaghetti noodles, tossing them all in the mixture. Once coated, add in 1 1/2 cups of the spaghetti sauce, coating them in that as well. (Set aside the rest of the sauce for serving.)
Use a fork to twirl a bunch of the noodles into a ball, placing each "nest" of noodles into a cup of the muffin tin. It should fill it about 3/4 of the way up. Nestle a frozen meatball in the center.
Bake for about 20 minutes, until the meatballs are thoroughly cooked. Let cool before removing the nests from the muffin tin. Serve with additional spaghetti sauce and fresh basil, for garnishing on top.