For the cupcakes: Preheat the oven to 350 degrees F. Line a standard cupcake pan with 12 paper baking cups, and a second pan with 6 baking cups, or grease pans with butter if not using baking cups. Sift together the flour, baking powder, cinnamon, and salt on a sheet of parchment paper or wax paper and set aside.
Place the butter in the bowl of a stand mixer or in a bowl with a handheld electric mixer. Beat on medium speed until fluffy. Stop to add the sugar; beat on medium speed until well incorporated, approximately 3 to 5 minutes. Add the eggs one at a time, mixing slowly on medium speed, after each addition. It's important to add them one at a time so that they will completely incorporate into the batter and you don't put too much weight on your batter at once. This would collapse all the little air bubbles you created when you creamed the butter and sugar.
Reduce the speed to low. At this stage, it's always important to mix as slowly and as little as necessary since you don't want to traumatize your batter. Add 1/3 of the flour mixture to the butter mixture, then gradually add 1/3 of the hot water, beating until well incorporated. Add another third of the flour mixture, followed by 1/3 of the hot water. It's important to add the flour and water little by little like this, so that your batter does not have too much weight thrown on it and that you allow each amount of flour and water to completely mix into the batter. Stop to scrape down the bowl as needed. Add the remaining flour mixture, followed by the remaining hot water, and beat just until combined.
Using a spatula, fold the grated apple into the batter. Take care not to overmix the batter. If you overmix the batter, the cupcakes will not be light and fluffy but instead very dense. Use a standard-size ice cream scoop to fill each baking cup with batter, so the cups are 2/3 full. Bake for 18 to 20 minutes (start checking at 15 minutes) or until a toothpick inserted into the center of a cupcake comes out clean. After 5 minutes, transfer the cupcakes to a wire rack to cool completely for approximately 20 minutes.
It's always best to cool the cupcakes at room temperature. Putting them in the refrigerator to cool can dry out the cake.
For the vanilla cream cheese frosting: Place all ingredients in the bowl of an electric mixer fitted with the paddle attachment; beat until well combined. Be sure to beat on high speed at the very end for at least 2 minutes to ensure that the frosting is light and fluffy.
For the caramel: Pour the sugar and water into a large saucepan. Heat on medium-high heat and stir constantly until the sugar completely liquefies. Stir constantly and be careful not to burn the sugar. After all the sugar has dissolved, add the butter and vanilla extract to the saucepan and mix thoroughly. Once the butter has melted and the butter and sugar are completely mixed, remove from heat and, using a whisk, slowly whisk in the heavy cream until you reach a beautiful golden brown caramel color. Set aside and let cool and thicken for 5 minutes at room temperature. Refrigerate for 20 minutes to thicken further before you use to fill or decorate.
Signature Swirl: For this recipe, transfer the vanilla cream cheese frosting into a plastic disposable piping bag, fitted with a large round metal tip. Be sure to whip up your frosting so it is light and airy. You don't need to twist the top of your bag — you can just hold it closed with one hand and use your other hand to hold the bag near the bottom and squeeze. Start in the center of the cupcake, applying pressure to the bottom of the bag, and guide the tip around the cupcake in a circular motion, then end in the center with a burst of pressure. Try to move quickly and confidently. If you go too slowly, the frosting may come out uneven. You can then add your decorations.
For this cupcake, take the squeeze bottle of caramel and drizzle a flower pattern (or pattern of your choice) on top of each cupcake. You could also top with an apple slice, a sprinkling of cinnamon, or a piece of hand-shaped apple fondant!
Creaming butter and sugar: When you cream the butter and sugar, you are creating millions of little air bubbles that will expand with the addition of your leavening-the baking powder or baking soda. If you mix too fast or too long, you will collapse all your air bubbles and your cupcakes will be really dense and brick-like not light and fluffy.
How to stuff a cupcake: Sometimes it's nice to have a little surprise in the center when you bite into a cupcake. This recipe has caramel that oozes out (yum!). To get that caramel right in the center, line up cooled cupcakes on a sheet of wax paper so you don't get caramel on your counter. Using an apple corer, gently remove the center of each cupcake, cutting all the way through the cupcake till you hit the paper baking cup, then pour the cooled caramel into a plastic squeeze bottle or a pastry bag and squeeze caramel filling into the center of each cupcake. Make sure your cupcakes are cooled or they could collapse if you try to core them when they are too hot. You can use this technique to fill your cupcakes with frosting, chocolate ganache, preserves, fudge, marshmallow, and anything else your heart desires!