In large bowl, beat butter with electric mixer on medium-high speed until light and fluffy. Add sugar; beat until creamy, scraping bowl frequently. Stir in milk, vanilla, almond extract and salt. Stir in flour until well mixed.
Measure 1/2 cup of dough into resealable food-storage plastic bag; refrigerate. Divide remaining dough in half; roll each into a 6-inch log. Roll 1 log in yellow sugar; roll other log in blue sugar. Wrap logs separately in plastic wrap or waxed paper. Chill until firm, at least 2 hours.
Heat oven to 350°F. For each cookie, place 2 pretzels with flat sides touching on ungreased large cookie sheets, 3 inches apart. Cut dough into 48 (1/4-inch) slices. (If dough cracks, allow to sit at room temperature a few minutes.) To make angel body, fold in opposite sides at top of each slice to make triangular-shaped body; place each slice on top of 2 pretzels, so double rounds of pretzels form angel wings at each side. Press lightly into pretzels. Using reserved dough from plastic bag, roll 1/2 teaspoon dough into ball; place on top for head of each angel. Press 2 sliced almonds into dough to make song book. Repeat to make 48 cookies.
Bake 11 to 14 minutes or until edges are firm and just begin to brown. Cool 2 to 3 minutes. Remove from cookie sheet to cooling rack. Cool completely, about 15 minutes.
Pipe yellow icing on cooled cookies to make eyes and hair. Use pink decorating icing to draw mouths. Let stand until frosting is set.