I have made quite a few cakes but haven't really cut figures with a template. I have looked online and found some different methods and tips. I was wondering what works best for you.

I am trying to emulate an elmo like this:
http://cakecentral.com/gallery/1539560

I found a coloring page with the same Elmo to use as a template.

Would you use an edible pen for the black or consider using royal icing?
Would you adhere it with shortening to keep it in place when cutting?
Do you use an X-acto knife?
How long would you keep the base of the figure to insert it into the cake?
Would you use straight red gumpaste/fondant or mix it with orange?

Thanks for any thoughts or tips!

Or should I attach Elmo to wires?