In large bowl, break up cookie dough. Stir or knead in flour until well blended. Reshape into log. If too soft to cut into slices, refrigerate up to 30 minutes.
Heat oven to 350°F. Cut dough into 28 (1/4-inch) slices, reshaping each into a round. For each cookie, cut narrow strips from opposite sides of slice. On ungreased cookie sheet, place larger piece. Shape dough strips into balls; roll in sugar crystals. Place ball of dough on each cut side, 2/3 of the way down, on inside edge of cookie to form cheeks; press gently so balls almost touch. Repeat with remaining slices, placing 2 inches apart on cookie sheets. Repeat with remaining dough.
Bake 7 to 11 minutes or until light golden brown. Cool 1 minute; remove from cookie sheets to cooling racks. Cool completely, about 10 minutes.
In small bowl, place 1/2 cup of the frosting. Stir in icing color until well blended. Frost top of each cookie with red frosting for hat. Add marshmallow half, cut side down, for tassel on hat.
Place remaining frosting in decorating bag fitted with writing tip, or in small resealable food-storage plastic bag with small hole cut in 1 corner of bag. Pipe white frosting around remaining cookie edge for beard and across bottom of hat. Attach candies with frosting for eyes, nose and mouth. Pipe white frosting for mustache.