we did this theme for my daughter's first birthday and we had a blast. first off, my hubby and i wore overalls and he even wore his boots and cowboy hat. we decorated the tables with pink gingham (you could use red or blue) fabric and had daisies filled in milk bottles and mason jars as the "center pieces." we scattered some hay around the base of the jars for added effect. we had a couple bails of hay in the back yard for the kids to climb on and it's super cheap. i made a big pink pig out of construction paper and the kids played "pin the tail on the piggy." we found a cow pinata at party city. the website birthdayexpress.com has some great farm theme stuff including favors and extra fun stuff for the kiddies.
we didn't do anything special for the cake...my family was more concerned about taste than how it looked (even though i LOVE being creative like you, i knew they would complain because sometimes faundant doesn't taste so great.)so we just took our napkin to our favorite bakery and had them copy the picture. but we did make one for her to destroy for herself in the shape of a piggie's face.
have a great time. i'm getting excited for you just thinking about it!!
p.s. i love st. cupcake too! i had them at the shower for my twins. i have to say, tho, the cream cheese frosting is a bit tart for some kids. my 11yo doesn't enjoy them and their buttercreme is just okay. they do special orders. like, i wanted all of mine to have light and dark pink crystal sprinkles on white frosting and they came out cute. but i doubt the cost is effective for 2yo. check out frostingonthecake.com or thedesserttray.com.