Spin-spin interactions generated by a detuned cavity are a standard mechanism for generating highly entangled spin squeezed states. We show here how introducing a weak detuned parametric (two-photon) drive on the cavity provides a powerful means for controlling the form of the induced interactions. Without a drive, the induced interactions cannot generate Heisenberg-limited spin squeezing, but a weak optimized drive gives rise to an ideal two-axis twist interaction and Heisenberg-limited squeezing. Parametric driving is also advantageous in regimes limited by dissipation, and enables an alternate adiabatic scheme which can prepare optimally squeezed, Dicke-like states. Our scheme is compatible with a number of platforms, including solid-state systems where spin ensembles are coupled to superconducting quantum circuits or mechanical modes.