Preheat & prep: Preheat oven to 350°F with rack in middle. Line a rimmed baking sheet with parchment paper.
Make the panade: Tear bread into small pieces into a small bowl. Pour milk over top and let sit 5 minutes. Mash with fork until it becomes a thick paste. Squeeze out excess milk if needed.
Cook the aromatics: Heat a drizzle of olive oil in a skillet over medium heat. Add onion and cook until soft and translucent, about 4 minutes. Add garlic and cook 30 seconds more. Remove from heat and let cool slightly.
Mix everything (gently): In a large bowl, combine ground beef, Italian sausage (squeeze from casings if needed), panade, cooked onion/garlic, Parmesan, mozzarella cubes, egg, parsley, oregano, fennel seeds (if using), salt, and pepper. Use hands to mix just until combined – do not overmix.
Shape the loaf: Transfer mixture to prepared baking sheet. Shape into a loaf about 9x4 inches. Pat gently into a rectangle and round the edges.
Glaze it: In a small bowl, stir together marinara and brown sugar (or balsamic). Brush about half over top and sides of loaf. Reserve remaining glaze.
Bake: Bake 50–55 minutes until internal temperature reaches 160°F in center. Top should be browned and glaze sticky at edges.
Rest and serve: Let meatloaf rest on pan for 10 minutes (not optional – juices need to redistribute). Brush with remaining glaze while warm. Slice with a serrated knife into 1-inch thick slices. Serve with extra marinara if desired.