In small bowl, cream butter and confectioners' sugar until light and fluffy. Beat in extract. Combine flour and cornstarch; gradually add to creamed mixture and mix well.
Shape into 1-in balls. Place 2 inches apart on ungreased baking sheets. Bake at 350 degrees for 10-12 minutes or until bottoms are lightly browned. Remove to wire racks to cool.
In a small bowl, beat butter until fluffy. Add the confectioners' sugar, milk, extract and coloring if desired; beat until smooth. Spread over cooled cookies; sprinkle with crushed candies. Store in airtight container.