Yes you can make them out of royal icing. Find a font you want to use that all the words that you want to put on the cake , print out the font page than place wax paper over the font paper than take your bag of royal icing and pipe over the font letters that you are gonna put on the cake. Make sure to make extra because they break easily .
I've read on here where you still put buttercream on the cake dummy so that the fondant has something to stick to. I have also read where some people sand the edges just alittle bit because there so sharp that they make the fondant tear.
Maybe I off here but if you are seeing the ridges of your cake thru your fondant than it sounds like your crumb coat isn't thick enough. I would put a crumb coat than let that harden than put another coat on it let that set that take a viva paper towel and smooth the cake than put your fondant on.
Welcome to cake central ( cc ) here's a website that has lots of cupcake recipes. Www.cupcakeproject.com I LOVE the ultimate vanilla cupcake recipe off the site its so moist and tasteful , just yummy. So HAPPY BAKING. and again welcome to cc