Preheat the oven to 350°F (175°C). Grease and flour two 8-inch round cake pans.

In a mixing bowl, cream together the softened butter and sugar until light and fluffy.

Add the eggs one at a time, mixing well after each addition. Stir in the vanilla extract.

In another bowl, whisk together the flour, baking powder, and salt.

Gradually add the dry ingredients to the wet ingredients, alternating with the milk, until just combined.

Divide the batter evenly between the prepared cake pans.

Bake for 25-30 minutes or until a toothpick inserted into the center comes out clean.

Allow the cakes to cool in the pans for 10 minutes, then transfer to a cooling rack to cool completely.

In a mixing bowl, beat the softened butter until creamy.

Gradually add the powdered sugar, alternating with the milk, and mix until smooth.

Add the vanilla extract and mix until combined.

Divide the frosting into two bowls. Color one with blue food coloring and the other with pink food coloring.

Place one cake layer on a serving plate. Spread a layer of blue frosting on top.

Add the second cake layer on top and frost the entire cake with the remaining blue frosting.

Use pink fondant to create Lilo's features and blue fondant for Stitch's features. Decorate the cake as desired.

Sprinkle with edible glitter if using, and serve.