Prepare cake batter as directed on package for cupcakes, adding 1/4 cup of the drink mix to batter. Bake as directed. Cool completely.
Beat cream cheese, butter, vanilla and remaining 2 Tbsp. drink mix in large bowl with electric mixer on medium speed until well blended. Gradually add sugar, beating until well blended after each addition.
Frost cooled cupcakes with cream cheese mixture. Sprinkle each with about 1 tsp. cereal.