Hi J.,
I understand the desire to have a healthy birthday cake, and considering the whole childhood obesity issue, I certainly don't want to encourage you to give your girls something you don't feel comfortable with. There are all kinds of recipes out there using rice flour, wheat flour, or no flour. You might want to do a search for diabetic and lactose free cake and frosting recipes. That would certainly be a great alternative for you.
Another great option is an angel food cake (or angel food cake cupcakes!) with mashed up raspberries or blueberries -or peaches or cherries - you get the idea! and maybe a little light whipped cream. I'd stay away from strawberries until they're two - unless your doctor says it's OK or you've given them strawberries already.
Or, if you don't want to go either of those routes, you can do what we did (we were the same way with our son's first birthday). We made cupcakes (so i knew what went into them and I used splenda for baking instead of full boar sugar) and he got his own cupcake (with little icing) with a candle in it. That way we could limit the amount he would consume without making any special recipe. And frankly, he didn't like it all that well anyway!!! He would have preferred green beans or peas. ;)
Keep your kids away from refined sugar as long as you can. We have relaxed our "no sugar" policy since then and we deeply regret it. At the same time, you don't want to stress yourself out and never let them have it or they might go stir crazy when they do get it (because they EVENTUALLY will!)
I have a hunch that if we hardwire our kids to enjoy natural sweet foods like fruits and veggies that they will prefer them over refined sugar treats. It has worked with our son so far. He likes sweets but he would choose his peaches or cooked carrots over a cookie still at this point.
Anyway, enough of my soap box (sorry about that!)
I removed the link I sent you after I looked at some of the ingredients...