I'm also working on creating custom wreaths with custom appliques. Here is a cupcake one for my kitchen, but I think a felt cupcake applique would look better! You'd be able to pick the colors and whatever type of applique you'd want (cupcake, hearts, flowers etc). I think it's pretty fun :)
I made this monster wreath back in 2006, and I know it's a terrible picture...but it's Halloween decor! I'll have to see about getting a better picture :) All I did was cut 2 circles out of fun fur, cut slits in it for the eyes....and I hot glued it all together and stuffed it with plastic grocery bags.