Preheat oven to 350 degrees F. Line a cupcake pan with cupcake liners; set aside.
In a bowl fit with a mixer, beat sugar and butter until creamed, about 3 minutes. Add eggs, one at a time. Increase speed to medium and continue to beat about 3 minutes, whipping down the sides of the bowl with a spatula.
Beat in vanilla extract, caramel extract, salt, baking soda, baking powder, apple pie spice, and cinnamon. Scrape down the sides of the bowl and continue to beat about 1 minute.
Slowly beat in heavy cream. Beat in flour, a little at a time. Beat in sour cream until incorporated. Scrape down sides of the bowl, beat for a few more seconds.
Mix 1/4 cup all-purpose flour with finely diced apple then beat apple mixture into cupcake mixture.
Spoon batter about 1/2 full. Bake in oven for about 22 minutes or until the center of the cupcake comes out clean with a toothpick. Allow to cool completely before frosting.
TO MAKE THE FROSTING
Beat softened butter, vegetable shortening, cinnamon, and confectioner's sugar for 3-5 minutes. Beat in 1/4 softened cream cheese at a time. Beat in vanilla and caramel extract and a pinch of salt. Beat for an additional 3 minutes. Fill a cupcake liner bag with frosting.
Refrigerate frosting for about 30 minutes. Use a cupcake tip (such as a Russian Cake Tip) to frost cupcakes. Top with cinnamon sugar apple, below.
TO MAKE THE CINNAMON SUGAR APPLE TOPPING
Use the small side of a melon baller to make apple circles. Coat in cinnamon sugar then place on top of frosted cupcakes.