Preheat oven to 325˚F.
Mix cream cheese, butter, sugar, orange peel and vanilla using an electric mixer until light and fluffy, about 3 to 4 minutes. Add eggs one at a time, beating after each addition. Beat in oil and milk. Combine flour, baking powder and salt. Add to orange mixture beating just until mixed.
Portion into paper lined muffin tins; fill cups 2/3 full. Bake for 30 to 35 minutes, or until a wooden toothpick inserted in centers of cupcake comes out clean. Let cool 10 minutes in pan. Remove warm cakes from pan and finish cooling on wire rack (a minimum of 30 minutes). Frost cupcakes when cool.
Mix all ingredients with an electric mixer, until frosting is of desired spreading consistency. Garnish with lemon or lime peel, if desired.