Preheat oven to 350° F. Lightly grease a 9x13 baking dish and set aside.
Bring large pot of water to a rolling boil. Salt generously and cook ziti according to package directions for al dente. Drain and set aside.
In a deep skillet with high sides, over medium-high heat, brown the sausage, breaking apart as it cooks. Drain grease if desired.
To the cooked sausage, add olive oil, onion, and garlic and saute until mostly tender, about 3 minutes.
Stir in diced tomatoes, marinara sauce, water, basil, oregano, bay leaves, salt, and black pepper. Stir well. Cover and simmer 30 minutes. Taste sauce and adjust seasonings if needed. Remove bay leaves.
Add cooked ziti to sauce and stir to coat. Add in fresh mozzarella and parmesan cheese. Stir to melt slightly.
Pour into baking dish and sprinkle with 1 cup shredded mozzarella cheese. Cover with lightly greased foil and bake for 20-30 minutes or until hot and bubbling.
Top with fresh chopped parsley (optional) and serve hot.