1In large bowl, beat butter, sour cream and granulated sugar with electric mixer on medium speed until creamy. Add egg, lime peel, lime juice and vanilla; beat until smooth. On low speed, beat in flour, baking soda and salt until dough forms. Gather dough into ball; divide in half. Shape each half into a disk; wrap in plastic wrap. Refrigerate 1 hour.
2Heat oven to 375°F. Place pastry cloth on work surface; sprinkle with flour. With floured cloth-covered rolling pin, roll 1 disk of dough 1/8 inch thick. Cut with floured 3-inch fluted cutter. With 1-inch scalloped or fluted canapé cutter, cut out center of each circle. On ungreased cookie sheet, place wreath cutouts 1 inch apart. Cut each small cutout in half; brush backs of small cutouts with water and place on wreaths for bows. Repeat with second disk of dough.
3Bake 6 to 8 minutes or until edges start to brown. Remove from cookie sheet to cooling rack; cool completely.
4In small bowl, mix powdered sugar and 2 tablespoons of the lime juice with wire whisk. Stir in remaining 1 tablespoon lime juice, 1 teaspoon at a time, until glaze is thin. Working with a few cookies at a time, brush glaze over cookies and immediately decorate with sugars and sprinkles as desired. Let stand until set. Store in layers with waxed paper between.