For stars: Spray inside of 4 star-shaped cookie cutters with nonstick spray. Oil baking sheet; place cutters on sheet. Combine sugar and 2 tablespoons water in heavy small saucepan over low heat. Stir until sugar dissolves. Increase heat; boil until syrup turns deep amber, brushing down sides of pan with wet pastry brush and swirling pan occasionally, about 4 minutes. Immediately pour thin layer of hot syrup inside each cookie cutter. Cool stars completely. Push stars out of cutters; wrap in foil. (Can be made 1 day ahead. Store at room temperature.)
For syrup: Stir sugar and 1/3 cup water in heavy small saucepan over low heat until sugar dissolves. Increase heat and boil without stirring until syrup turns deep amber color, brushing down sides of pan with wet pastry brush and swirling pan occasionally, about 7 minutes. Add 1/2 cup hot water (mixture will bubble up). Stir over low heat until hard bits dissolve. Cool caramel syrup.
For cake: Preheat oven to 350°F. Butter and flour two 9-inch-diameter cake pans with 1 1/2-inch-high sides. Line pans with waxed paper; butter paper. Sift first 4 ingredients into small bowl. Stir milk and butter in small saucepan over low heat just until butter melts; set aside.
Using electric mixer, beat eggs and sugar in large bowl until thick enough for batter to fall in heavy ribbon when beaters are lifted, about 5 minutes. Beat in orange peel and vanilla. Add flour mixture; beat just until blended. Add warm milk mixture; beat just until blended. Divide batter between prepared pans.
Bake cakes until tester inserted into center comes out clean and cakes begin to pull away from sides of pans, about 24 minutes. Cool cakes in pans on racks 20 minutes. Cut around pan sides and turn cakes out onto racks; peel off paper. Turn cakes right side up. Using toothpick, poke holes in tops of cakes. Brush half of caramel syrup over each cake. (Can be made 1 day ahead. Wrap cakes and let stand at room temperature.)
For frosting: Combine all ingredients in large bowl; beat until firm peaks form. Place 1 cake layer on platter. Spread 1 1/2 cups frosting over. Top with second layer. Spread frosting over top and sides. Chill at least 1 hour. (Can be made 1 day ahead. Cover; keep chilled.)
Stand stars upright on cake. Serve cake cold or let stand up to 1 hour at room temperature before serving.