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Whisk together flour, baking powder and salt in a large bowl; set aside. In a second large bowl, beat butter and sugar with an electric mixer until fluffy, about 30 seconds, then beat in 1 egg. Add lemon juice, zest and vanilla and beat again until smooth, about 30 seconds more. Add flour mixture and beat to combine. Add food coloring (if using) and beat again, or knead by hand, just until color is evenly distributed. Shape dough into two logs then wrap each snugly in parchment paper, twisting the ends in opposite directions like a piece of candy to tighten each roll and make it uniformly round and about 6 inches long. Chill for 2 hours.
Preheat the oven to 350°F. Whisk remaining egg and 1 tablespoon water together in a small bowl to make an egg wash; set aside.
Line two large baking sheets with parchment paper. Cut dough crosswise into 1/4-inch-thick slices and transfer to prepared baking sheets, arranging cookies about 1 inch apart. Working with a few cookies at a time, brush tops with egg wash then decorate with dried fruit and nuts to make monster faces on each. Bake until light golden brown about the edges, 12 to 13 minutes. Set aside to let cookies cool completely then serve.