Prepare cake mix as directed on package, adding 1 tablespoon of the lemon extract. Spoon into 18 paper-lined muffin cups, filling each cup 2/3 full. Bake as directed for cupcakes. Cool cupcakes on wire rack.
For the Frosting, beat cream cheese, butter, sour cream and remaining 2 teaspoons lemon extract in large bowl until light and fluffy. Gradually beat in confectioners' sugar until smooth. Stir in food color until evenly tinted. Frost cooled cupcakes.
To decorate cupcakes, cut each marshmallow crosswise into 5 slices. Sprinkle 1 side of each marshmallow slice with decorating sugar. Arrange 5 marshmallow petals on top of each cupcake to resemble a daisy, pressing the marshmallows into the frosting. Place jelly beans in the center of the petals. Garnish with sprinkles.