Add grape tomatoes (16.5 ounces) to a 9X13-inch baking dish. Toss with olive oil (2 tablespoons). Place in the preheated oven and roast until the skins split and blister. Remove from the oven. Reduce oven temperature to 375ºF (190ºC).
While the crushed tomatoes roast, add sugar (1 1/2 teaspoons), salt (1 teaspoon), and black pepper (1/2 teaspoon) to the (28 ounces) can pureed tomatoes and stir to combine.
Pour seasoned crushed tomatoes over roasted tomatoes. Add water (1/4 cup), Italian seasoning (1 tablespoon), garlic (1 heaping tablespoon), basil (1 cup), mozzarella pearls (8 ounces), and gnocchi (16 ounce). Stir until evenly combined.
Top the gnocchi mixture with slices of fresh mozzarella (8 ounces). Bake in oven until sauce is bubbly and cheese is beginning to brown. Serve!