In a large bowl, beat the butter and cream cheese together with an electric mixer on medium speed, just until smooth and well blended.
Add the sugar and salt. Beat on medium speed until pale and fluffy. Mix in the egg, then the extracts until incorporated.
On low speed, mix in the flour in two additions, just until combined.
Mix in the food coloring, a tiny bit at a time, until the desired shade is achieved.
Divide the dough into two disks. Wrap them in plastic wrap and refrigerate until firm, about 2 hours or up to overnight.
Preheat the oven to 375ºF (190ºC). Line two large cookie sheets with parchment paper.
On a lightly floured surface, roll the dough to 1/8" thickness. Cut out cookies with a 2-inch blossom cutter..***
Place the cookies about 2 inches apart onto the prepared baking sheets. Sprinkle with sparkling sugar if using.
Bake for 7-9 minutes until the bottom edges are lightly browned. Remove from the oven and transfer the cookies to a cooling rack.
Cool completely then ice with cherry icing, if desired. Decorate with sugar pearls or sprinkles before the icing sets.