Heat oven to 350°F (325°F for dark or nonstick pan). Place paper baking cup in each of 24 regular-size muffin cups. In large bowl, beat cupcake ingredients with electric mixer on low speed 30 seconds, then on medium speed 2 minutes, scraping bowl occasionally. Divide batter evenly among muffin cups, filling each about two-thirds full.
Bake 19 to 24 minutes or until toothpick inserted in center comes out clean. Cool in pan 10 minutes. Remove from pan to cooling rack. With toothpick or wooden skewer, pierce tops of cupcakes in several places.
In small bowl, mix 1 cup powdered sugar and enough of the 2 to 2 1/2 tablespoons lime juice until glaze is smooth and thin enough to drizzle. Drizzle and spread glaze over cupcakes. Cool completely, about 30 minutes.
In large bowl, beat cream cheese and butter on medium speed until light and fluffy. On low speed, beat in vanilla and 3 1/2 cups powdered sugar until mixed; beat on medium speed until fluffy. Frost cupcakes, mounding and swirling frosting in center. Garnish with lime peel. Store covered in refrigerator.