Heat the olive oil in a large skillet over medium-high heat. Add the sausage and cook for 2-3 minutes to sear slightly, stirring partway through.
Add the onions and cook for 5 minutes, stirring occasionally. Add the sliced peppers and garlic. Continue to cook and stir for another 3-5 minutes until onions have softened and peppers are tender-crisp. Transfer the sausage, peppers, and onions to a plate and set aside.
Add the diced tomatoes and water to the pan, scraping up any browned bits from the bottom with a wooden spoon. Bring to a boil over high heat, then add the pasta. Cover and reduce the heat to medium-low, simmering until the pasta is al dente and has absorbed most of the liquid.
Meanwhile, blend the milk, cream cheese, Cajun or Creole seasoning, smoked paprika, and flour in a blender.
Melt the butter in a large pot over medium-high heat. Add the garlic and cook until fragrant, about 60 seconds.
Add the blended milk mixture to the garlic and butter. Cook and stir until slightly thickened enough to coat the back of a spoon. Remove from heat and stir in the parmesan cheese.
Add the sausage and peppers along with the cooked pasta to the sauce, stirring until everything is combined.
Serve with additional parmesan cheese and chopped parsley sprinkled on top.