If you have a cake decorating shop in your area try and buy some Wafer paper. It is 8x11 sheets of rice paper, the same kind that they used to make those little UFO candies. This paper is the same that most bakerys use now for the computer photo cakes. (It tastes like the host if you are catholic.)
I use it to decorate cupcakes all the time. It is fairly opaque so you place the paper over the design and trace with food color markers. You can also use new clean non-toxic markers to draw and color the design, they are nontoxic so they are edible. I find that some colors are not available in the food color markers you can get at the cake decorating store so I have to compormise. That Dolphin blue will be hard to match with food color markers. Don't steal from your kids though, buy a clean new set for your cupcakes.
You can put the wafer paper right on the frosted cupcake but I like to get some clear gel and put a light coating on the design. This makes it shiny. You can get the gel at the cake store too. Ask the saleperson for more info on using the paper.
I made princess cupcakes for my niece last year and they were the hit of the party. I also made cookies with the princesses on them for the girls to take home. I used frosting that gets hard (merienge frosting, you can get at the cake store) and put a princess into the frosting then decorated a little border around the paper. The girls were very disappointed this year when I didn't bring any cookies for them to take home.
Hope this gives you an idea. Peggie