Heat oven to 375°. In a medium bowl, whisk flour, baking soda and salt.
In a large bowl, with an electric mixer, beat butter and cream cheese until smooth. Add 1 cup of the sugar and beat until pale and fluffy, about 2 minutes. Beat in egg, followed by vanilla. On low speed, beat in flour mixture.
Place remaining 1/4 cup sugar in a small bowl. Scoop scant tablespoonfuls of dough into your hand. Roll into balls, then roll balls in sugar. Place on an ungreased baking sheet and continue shaping dough.
Bake at 375° for 12 minutes per batch. Remove from oven and press down centers with your thumb or the reverse end of an ice cream scoop or other kitchen tool (we used a citrus reamer). Repeat with all remaining dough. Cool cookies on a wire rack.
Meanwhile, with an electric mixer, beat butter until smooth. Add confectioners’ sugar and half-and-half and beat until smooth. Divide among 4 bowls and tint yellow, pink, blue and green or your desired colors. Spoon into piping bags and snip a 1/2-inch opening. Pipe filling into cooled cookies; sprinkle with sparkling sugar, if using. Refrigerate until filling is firm before stacking.