Beat together butter and sugar in small bowl until light and fluffy. Beat in egg, lemon peel, vanilla and salt. Gradually beat in flour until thoroughly incorporated. Add water, a few drops at a time, only until dough starts to come away from side of bowl. Wrap dough in plastic wrap. Refrigerate until firm, about 2 hours.
Preheat oven to 350 degrees F. Lightly grease 4 cookie sheets. On a lightly floured surface, roll out dough to 1/8 inch thickness. Cut out various shapes using seasonally appropriate cookie cutters. Reroll scraps and continue to cut out cookies.
Bake for 12 to 15 minutes or until beginning to brown around edges. Remove cookies to wire rack to cool before decorating.
To prepare icing: beat egg whites in small bowl until foamy. Slowly beat in the powdered sugar. Continue to beat until thick and creamy. Add just enough water to get a good spreading consistency. Tint with food coloring, if you wish.
Spread evenly over cookies. Decorate with eatable glitter, sprinkles, dragees and cinnamon red hots, if desired.
Ingredients:
Ingredients for icing: