Thank you. I called a few state offices today. I got some clarification. I can you icing that has a shelf life. I will glaze the Lemon cookies with a lemon glaze. I will use colored sugar on the sugar cookies. My skills aren't there yet for decorating but my kids love it with just sugar on top. I will see how it goes and let everyone know. I really love the idea of marketing "Heirloom" cookies, I just don't see those recipes around much anymore.
I did a little nosing around in the Maryland cottage food laws last night too, because i was so struck by their apparent restrictiveness. 
From what I could gather on various sites, they're really only concerned about perishable icings that need refrigeration at farmers' markets and such. So that's good news!
Anyway, I look forward to hearing how your business unfolds. Do keep us posted!