Preheat Oven: Set oven to 350°F (175°C) and line a muffin tin with cupcake liners.
Dry Ingredients: In a medium bowl, whisk together flour, baking powder, baking soda, and salt.
Cream Butter and Sugar: In a large bowl, beat butter and granulated sugar until light and fluffy.
Add Eggs and Vanilla: Add eggs one at a time, beating well after each. Stir in vanilla extract.
Combine Wet and Dry: Alternately add the flour mixture and buttermilk to the butter mixture, starting and ending with the flour mixture. Mix until just combined.
Fill Liners: Fill each cupcake liner halfway with batter, add a spoonful of peach preserves, and cover with more batter until three-quarters full.
Bake: Bake for 18-20 minutes or until a toothpick comes out clean. Let cool completely.
Prepare Frosting: In a small bowl, beat cream cheese, powdered sugar, and milk until smooth and creamy.
Frost Cupcakes: Frost cooled cupcakes with the cream cheese mixture. Top with diced fresh peaches.
Garnish: Drizzle honey over the top and sprinkle with sugar crystals.
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