In a large ovenproof skillet (such as a 10-inch cast iron), cook the Italian sausage and diced onion over medium-high heat. Break up the sausage as it cooks and stir often until fully browned. Drain excess grease if needed.
Add the pizza sauce to the skillet and stir to combine. Spread the mixture evenly across the bottom of the pan. Sprinkle 1 cup of shredded mozzarella cheese over the meat and sauce layer.
Arrange the frozen tater tots in a single, even layer on top of the cheese. Do not thaw the tots before baking. Add the remaining 2 cups of shredded mozzarella evenly over the tater tots. Sprinkle with Italian seasoning. Top with quartered pepperoni slices and drained mushrooms.
Bake uncovered for 30 minutes, or until the cheese is melted and bubbling and the tater tots are crisp and golden. Let sit for a few minutes before serving hot.