Heat oven to 350°F. Grease and flour 8 (6-ounce) custard cups; set aside.
Combine flour, baking powder and salt in bowl; set aside.
Combine sugar and 6 tablespoons butter in another bowl; beat at medium speed until creamy. Add eggs and vanilla; continue beating until well mixed. Add flour mixture alternately with 1/2 cup milk, beating at low speed after each addition. Stir in chocolate chips.
Divide batter evenly among prepared custard cups. Bake 20-23 minutes or until toothpick inserted near center comes out clean. Cool on wire racks 5 minutes. Loosen edge of cupcake by running knife around inside edge. Carefully remove cupcakes from custard cups. Cool completely.
Combine powdered sugar, 2/3 cup butter and enough milk for desired frosting consistency in bowl. Beat at medium speed, scraping bowl often, until smooth and creamy. Reserve 1/2 cup frosting.
Divide remaining frosting into small bowls for as many colors as desired. Stir 1 to 2 drops food color into each bowl; mix well. If necessary, cut top of cupcakes off so surface is flat. Place cupcakes onto serving platter, flat-side down. Frost rounded side of each cupcake with desired color frosting; smooth frosting.
Fit pastry bag with small hole decorator tip; fill with reserved white frosting. Starting at center top of cupcake, pipe five radiating lines over top and down sides of cake (to look like seams in baseball cap). Place 1 candy-coated chocolate piece at center top.
Cut 8 (3 1/2-inch) circles from paper; write names on brims, if desired. Place circles halfway under cupcakes, forming hat brims.