Preheat oven to 400°F. Melt 4 tablespoons butter in large saucepan over medium-high heat. Add flour, whisking constantly for about a minute. Add milk and water, whisking to remove any of flour-butter mixture from bottom of pan. Bring to boil, then reduce heat and gently simmer. Add salt, pepper and pinch of saffron. Simmer until mixture begins to barely thicken, about 10 minutes. Remove from heat.
Meanwhile, in medium frying pan, crisp pancetta over medium heat until fat is rendered and nicely browned. In 9x13x2-inch baking dish, toss uncooked elbow pasta with parmesan cheese. Transfer pancetta to baking dish using slotted spoon. Toss gently to combine. Add remaining 3 tablespoons of butter to pan with rendered pancetta fat and melt over low heat. Add panko to medium bowl. Pour butter over top. Mix to combine. Stir in parsley and season with salt.
Pour prepared saffron sauce over macaroni mixture. It is not necessary to stir mixture. Cover pan with foil and carefully transfer to oven. Bake 20 minutes.
Remove from oven and gently stir. Scatter cubes of fresh mozzarella evenly across mixture. Top with panko bread crumb mixture. Bake additional 15 – 20 minutes, or until top is golden and macaroni is bubbling. Let sit 10 minutes before serving.