Preheat your oven to 350°F. In a large bowl, mix the lemon cake mix, water, oil, eggs, and dry pudding mix until well combined. Pour the batter into a greased 13×9-inch baking dish and bake according to the directions on the cake mix box. Let the cake cool completely.
While the cake is cooling, bake the Pillsbury Red, White & Blue Shape Sugar Cookies according to package directions. Allow them to cool fully before decorating.
In a separate bowl, beat the softened butter until smooth. Add the powdered sugar, vanilla, and 2 tablespoons of cream. Beat until fluffy, adding more cream a tablespoon at a time if needed for a spreadable consistency.
Frost the cooled cake with the vanilla buttercream. Line the edges with the cookies to form a fun border. Fill the center with star sprinkles and tuck the red and blue candies into the gaps between the cookies.