For the sauce, combine all ingredients and stir until smooth. Set aside.
For the meatballs, combine the first 6 ingredients in a large bowl, mixing well. Add the meat, using your hands to get everything evenly distributed, shape into ~36 meatballs. Place on a lined rimmed baking sheet and bake at 375°F for 20 minutes, or until almost cooked.
Pour the sauce into a Dutch oven, then add the partially cooked meatballs. Cover and simmer for another 10-15 minutes or until fully cooked (or you can place it all in a covered casserole dish and bake in the oven at 375°F until fully cooked). Remove the cover for the last 5 minutes to reduce and thicken the sauce.
Serve on their own, or over rice.