Wet ingredients. Place 1 ounce of cream cheese in the freezer. Using an electric mixer in a large bowl, combine the unsalted butter (7 tablespoons), vanilla (1 teaspoon), cream cheese (4 ounces), salt (1/2 teaspoon), and xanthan gum (1 teaspoon) until creamy (about 1 minute).
Dry ingredients. Add erythritol (1 cup ) and almond flour (1 3/4 cups), and combine until they form a dough. Add egg yolk (1) and combine just until it's mixed in. Remove cream cheese from the freezer and cut into 1/4" cubes. Stir the cubes into the dough using a spatula. Place dough in the fridge for 1 hour.
Form + bake. Preheat oven to 350 F and line a baking sheet with parchment paper. Roll the dough into 1" balls, and spread evenly on the baking sheet. Press the tops of the dough to form round discs. Bake in the oven until the edges become lightly golden (but not brown), about 15-18 minutes. Allow cookies to cool on a cookie sheet completely.
Frosting. Meanwhile, combine the egg white (1), vanilla (1/4 teaspoon), and erythritol (1 cup) together in a medium bowl. Place in the microwave, and use 15 -second intervals to slowly warm the frosting until it becomes drippy.
Decorate. Prep your "sprinkles". Once the cookies have cooled, pour icing over the top. Before it sets, sprinkle any toppings on top of the cookies. Allow icing the harden slightly before serving, and enjoy!