Heat oven to 350 degrees F. Cut each cookie in half. Roll each half into a ball. Place 1 inch apart on ungreased cookie sheets.
Bake 10 to 12 minutes or until edges are set and golden brown. Cool 5 minutes on cookie sheets before removing to cooling rack. Cool completely, about 10 minutes.
To make frosting, in large bowl, beat marshmallow creme and softened butter with electric mixer on medium speed until blended. Beat in powdered sugar until fluffy. Add food color, and beat until well combined.
Place frosting in resealable food-storage plastic bag. Cut off 1 tiny corner of bag. Pipe frosting, piling up in hat shape, on top of each cookie.
Top each hat with miniature marshmallow. Gently press sprinkles around bottom edge of each hat so they stick to frosting.