Preheat oven to 375°F and grease a 9x13-inch baking dish.
Cook pasta according to package directions until al dente. Drain and set aside.
In a large skillet, brown Italian sausage over medium heat, breaking it into crumbles. Drain excess fat.
In a large bowl, combine cooked pasta, sausage, marinara sauce, 1 cup mozzarella, half the pepperoni, Parmesan, Italian seasoning, garlic powder, and olives if using.
Pour mixture into prepared baking dish. Top with remaining mozzarella and pepperoni slices.
Bake for 25-30 minutes until cheese is melted and bubbly. Let stand 5 minutes before serving. Garnish with fresh basil.