Preheat the oven to 400 F and line a baking sheet with parchment paper.
In a large mixing bowl combine first 10 ingredients, 1 minced clove of garlic, salt and pepper. Mix well and form 25 meatballs. (If meatball doesn't hold the shape well, you can add a bit more of breadcrumbs)
Arrange meatballs on a prepared baking sheet and bake for about 15 minutes.
Meanwhile, in a large ovenproof skillet heat olive oil. Add mushrooms and cook on a medium heat until water evaporates, about 5-7 minute. Add the remaining minced clove of garlic and cook for another minute.
Stir in Marinara sauce, water and simmer for 5 minutes.
Arrange cooked meatballs in a skillet, gently coat them with the sauce and generously sprinkle with Mozzarella and Gruyere.
Preheat broiler and broil meatballs until cheese melts, about 2 minutes.
Serve immediately!