Preheat the oven to 350 degrees. Grease a deep 9 x 13 inch casserole dish. Set aside.
Bring a large pot of salted water to boil. Add the macaroni and boil until it's on the firmer side of al dente, about 6-7 minutes. Drain the pasta, then return it to the pot and set aside.
Meanwhile, heat olive oil in a large, deep skillet over medium heat. Add the onion, green pepper, and mushrooms to the skillet and saute until beginning to soften, about five minutes. Add the ground beef, breaking it up with a spoon. Cook, stirring occasionally, until no pink remains. Add the garlic, sauteeing an additional minute. Drain excess fat off the beef mixture, then season to taste with Kosher salt and pepper.
Add the tomato sauce, diced tomatoes, oregano, Italian herbs, and sugar to the beef mixture. Allow it to simmer for five or so minutes, stirring occasionally.
Combine the meat mixture and noodles in whichever vessel is biggest and stir to combine. Stir in 1 cup of cheddar cheese and 1 cup of Italian blend. Pour the mixture into the prepared mix. Top with the remaining 2 cups of cheese. Bake for 30-35 minutes, or until cheese is golden and melted. Top with parsley for serving, if desired.