Combine butter and sugar in bowl; beat at medium speed until creamy. Add egg, half & half and vanilla. Continue beating, scraping bowl occasionally, until well mixed. Add flour and baking powder; beat at low speed until combined. Add food color, if desired; mix well.
Divide dough in half. Shape each half into ball; flatten slightly. Wrap each in plastic food wrap. Refrigerate 1 hour.
Heat oven to 350°F.
Roll out dough, one ball at a time, (keeping remaining dough refrigerated) on lightly floured surface to 1/4-inch thickness. Cut into 16 (2 1/2-inch) squares. Cut center out of half the squares using 1 3/4-inch cookie cutter. Place cookies onto ungreased baking sheets.
Bake 8-10 minutes or until cookies are set and just beginning to brown around edges. Cool completely.
Melt candy coating according to package directions. Spoon into resealable plastic food bag; snip off tip of one corner.
Assemble each box by piping candy coating around edges of solid cookie square; place cut-out cookie square on top, pressing lightly to adhere. Pipe line of candy coating around edges of cut-out cookie; top with second cut-out cookie. Repeat with remaining cookies. Let stand 5 minutes or until candy coating is set.
Fill each cookie box with small candies. Place solid cookie square on top to form lid. Tie with ribbon or decorate, as desired.