In advance, make fondant decorations: Divide fondant into 6ths. Tint portions orange, blue, red, green and yellow; reserve remaining portion white.
To make streamers, cut narrow strips in each color and wind around cookie stick. Slide off stick and onto a board lightly dusted with cornstarch to dry.
Cut entire "cake" using pattern and white fondant. Cut icing areas and bottom of cake using pattern and red fondant. Cut out blue fondant candles, 1/2 in. wide x 2 in. high; cut yellow fondant flames using pattern. Using smallest star cutter, cut yellow stars; using round cutter, cut red, green and orange balloons.
Cut triangle balloon knots. Using narrow opening of tip 12, cut confetti dots in all colors. Place Cake Sparkles in plastic bag and crush with rolling pin. Brush flames and stars with water and sprinkle with Cake Sparkles.
Ice 2-layer cake, 3 in. high, smooth. Position fondant pieces on cake, trimming balloons as needed. Pipe tip 18 star bottom border. Position streamers, confetti dots and candles on cake.