1. Preheat the oven to 350°F (175°C) and line a cupcake tin with paper liners.
2. In a medium bowl, whisk together the flour, baking powder, baking soda, and salt.
3. In a separate large bowl, cream the softened butter and granulated sugar until light and fluffy.
4. Add the eggs one at a time, beating well after each addition, then stir in the vanilla extract.
5. Gradually add the dry ingredients to the butter mixture, alternating with the buttermilk, beginning and ending with the dry ingredients. Mix until just combined.
6. Gently fold in the peach preserves and diced fresh peaches.
7. Spoon the batter into the cupcake liners, filling each about two-thirds full.
8. Bake for 18–22 minutes, or until a toothpick inserted into the center of a cupcake comes out clean.
9. Remove from the oven and allow the cupcakes to cool completely on a wire rack.

For the Cream Cheese Frosting:

1. In a bowl, beat the softened cream cheese with powdered sugar until smooth.
2. Add the milk and continue beating until fluffy.
3. Once the cupcakes are cooled, frost with the cream cheese mixture.
4. Drizzle with honey and sprinkle with sugar crystals for garnish.