Preheat oven to 350 degrees F (175 degrees C). Line 2 (12-cup) muffin tins with cupcake liners.

Prepare the vanilla cake mix according to package instructions, substituting milk for water.

Pour batter into the prepared muffin tins, filling each cup about 2/3 full.

Bake for 12-15 minutes, or until a toothpick inserted into the center comes out clean.

Remove from oven and let cool completely on a wire rack.

In a large bowl, beat vanilla frosting with confectioners' sugar until stiff peaks form.

Divide frosting and color a portion with red or yellow food coloring.

Transfer colored frosting to a pastry bag fitted with a star tip.

Frost the top of 12 cupcakes with the white frosting using an offset spatula.

Place each frosted cupcake into a red or yellow cupcake liner.

Write each guest's name on a small colored flag made of construction paper.

Attach flags to toothpicks using rubber cement.

Cut 1 1/2 inches off the bottom of each sugar cone using a serrated knife.

Lightly coat each sugar cone with piping gel using a pastry brush.

Roll 6 cupcakes in yellow sanding sugar and 6 in red sanding sugar.

Insert a flag into the top of each sugar cone.

Position sugar cones slightly towards the back of each cupcake.

Cut shoestring licorice into 12 (2-inch) pieces for mouths and approximately 120 (1-inch) pieces for hair.

Use tweezers to attach licorice hair around the base of the sugar cones.

Add a red gumball for the nose and two mini chocolate candies for the eyes.

Pipe small stars of colored frosting along the base of the sugar cones and around the top of the cupcake liner.

For extra cupcakes, divide remaining white frosting, color with red and yellow food coloring, and pipe swirls onto cupcakes.

Sprinkle these extra cupcakes with nonpareil sprinkles.

Arrange all cupcakes on a cupcake stand and serve.