Heat a large heavy-bottomed pot or Dutch oven over medium-high heat. Add the olive oil, then add the Italian sausage. Break it into smaller pieces with a wooden spoon as it cooks until it's nicely browned, about 5-7 minutes.
Lower the heat to medium and add the diced onion, carrots, and celery to the pot. Cook until the vegetables soften, about 5-7 minutes, stirring occasionally.
If using mushrooms, add them now and cook until they release their moisture and begin to brown, about 5 minutes.
Add the minced garlic and cook for another 30 seconds until fragrant. Be careful not to burn it.
Stir in the tomato paste and cook for 2 minutes, allowing it to caramelize slightly. This develops a deeper flavor in the finished sauce.
Pour in the red wine, using it to deglaze the pot. Scrape up any browned bits from the bottom—that's pure flavor! Let the wine simmer for 2-3 minutes until slightly reduced.
Add the crushed tomatoes, bay leaves, dried oregano, dried basil, and red pepper flakes. Season with salt and pepper. Bring the sauce to a gentle boil, then reduce heat to low.
Partially cover the pot and simmer for at least 45 minutes, stirring occasionally. For an even deeper flavor, let it simmer for up to 1.5 hours.
After simmering, taste the sauce and adjust seasonings. If too acidic, add the sugar. If it needs depth, add a bit more salt.
Remove the bay leaves, then stir in the fresh basil and butter (if using). The butter enriches the sauce and helps balance the acidity of the tomatoes.
Serve over cooked pasta of your choice, with plenty of grated Parmesan cheese and additional fresh basil for garnish.