1Heat oven to 425°F. Spray 3-quart casserole with cooking spray. Cook and drain macaroni as directed on package. In 12-inch nonstick skillet, cook sausage over medium-high heat until no longer pink; drain. In same skillet, cook bell pepper and onion 5 minutes or until crisp-tender.
2In 4-quart saucepan, melt butter over medium-low heat. Stir in flour, salt and 1/2 teaspoon of the pepper flakes. Cook and stir until smooth. Gradually add milk and water, stirring constantly until thickened. Gradually add Cheddar cheese; stir until melted. Add macaroni, sausage and onion mixture; toss to coat. Spoon into casserole. Sprinkle with mozzarella cheese. Bake uncovered 30 minutes or until bubbly. Top with Parmesan cheese, pepperoni and remaining 1 teaspoon pepper flakes. Bake 2 to 4 minutes longer, or until lightly browned. Garnish with basil.