Set the Instant Pot to Sauté mode and heat oil. Add onion, garlic, and crushed red pepper. Sauté for a minute.
Add tomatoes, pasta, half of the basil leaves, salt, and water. Gently push all the pasta under liquids. Layer tomato sauce on top. Do not mix.
Close the Instant Pot and turn the steam release handle to sealing. Pressure Cook for 4 minutes.
Quick Release. Add fresh mozzarella cheese and balsamic vinegar. Give a quick stir.
Serve hot garnished with remaining chopped basil and shredded parmesan.
