Preheat the oven to 350 degrees F (175 degrees C).
Place 1 3/4 cups sugar in a food processor and blend until superfine, about 2 minutes.
Sift half the fine sugar, cake flour, and salt together in a bowl.
Whisk egg whites, water, cream of tartar, and lemon extract together in a large bowl for 2 minutes. Beat in remaining fine sugar using an electric mixer until medium peaks form. Sprinkle some of the flour mixture on top; stir in gently. Repeat with the rest of the flour mixture. Spoon batter carefully into an ungreased fluted tube pan.
Bake in the preheated oven until golden brown, about 35 minutes. Invert onto a cooling rack and let cool completely, at least 25 minutes.
Beat cream cheese and 1/4 cup butter together in a bowl using an electric mixer on medium speed until light and creamy. Add lemon juice; beat until just blended. Gradually mix in all but 2 tablespoons confectioners' sugar on low speed until frosting is just blended. Stir in lemon zest.
Mix 3/4 cup strawberries, blueberries, blackberries, and raspberries thoroughly in a bowl with 2 tablespoons white sugar.
Cut a curved, smile-shaped line near the bottom of each whole strawberry; carefully cut another, flatter curve above. Connect the two curves and carve out space between to create the smile. Leave room above the smile and below the leaves for eyeballs.
Place reserved 2 tablespoons confectioners' sugar in a small bowl. Dust hands with sugar and roll a tiny amount of stiff decorator icing between your fingers into a small ball. Place it on the strawberry, above the smile. Make another ball and stick it next to the first one. Stick 1 black sugar pearl onto each frosting ball to create eyes. Repeat with remaining whole strawberries.
Remove cake carefully from the pan, scraping edges from side if needed. Slice into 6 slices about 2 inches thick. Spread 2 tablespoons butter equally on the outside of the slices.
Heat a large skillet over medium heat. Add a cake slice; toast until lightly browned, about 1 minute per side. Place toasted cake on a plate. Spoon some frosting on top and let it drip down. Spoon sugared berries around the cake and place a smiling strawberry on top. Repeat with remaining cake slices, frosting, and berries.