1. Preheat the oven to 350°F (175°C) and line a muffin tin with cupcake liners.
2. In a medium bowl, whisk together flour, baking powder, baking soda, and salt.
3. In a large bowl, beat softened butter and granulated sugar until light and fluffy.
4. Add eggs one at a time, beating well after each addition, and stir in vanilla extract.
5. Alternately add the flour mixture and buttermilk to the butter mixture, beginning and ending with the flour mixture, and mix until just combined.
6. Fill cupcake liners halfway with batter. Add a spoonful of peach preserves in the center, then top with more batter until liners are about three-quarters full.
7. Bake for 18-20 minutes or until a toothpick inserted in the center comes out clean. Let cupcakes cool completely on a wire rack.
8. For the frosting, beat cream cheese, powdered sugar, and milk until smooth and creamy. Adjust the consistency as needed.
9. Frost cooled cupcakes with the cream cheese mixture and garnish with diced fresh peaches, a drizzle of honey, and sugar crystals.