In a large bowl, cream butter and sugar. Beat in egg, sour cream and vanilla. Combine flour, baking soda and salt; gradually add to creamed mixture. Cover and chill for 1 hour or until easy to handle.
On a work surface that has been sprinkled heavily with confectioners' sugar, roll out dough to 1/8-in. thickness. Cut with a 2-1/2-in. cookie cutters. Place 1 in. apart on greased baking sheets. Bake at 375° for 8-10 minutes or until lightly browned. Immediately remove to wire racks to cool.
For frosting, combine milk and pudding mix until smooth; set aside. In a large bowl, cream butter. Beat in pudding mixture. Gradually add confectioners' sugar, vanilla and food coloring if desired; beat on high speed until light and fluffy. Frost cookies and decorate with edible glitter. Yield: 5-1/2 dozen.