Could you do like a banana cake with a cream cheese icing? Cut dried apricots into little strips and make them into a big 4 shape? Am I just too much of a health nazi? What about even using pale yellow icing and sprinkles? Just cut back on the colour - I have had other parents make complaints about it before.

I use "No Egg" in my cakes but you can also substitute 1 tbsp psyllium husk and 1tbsp water, or 2 tbsp jam, or 2 tbsp apple sauce, or a mashed banana to bind it. Obviously this doesn'twork for cakes that require 10 eggs, but your average kindy cake, it should be fine.
I have no idea what she means by no cooked eggs. Up here in QLD, most places aren't fussed on eggs in cakes etc, but one place I worked in Vic wouldn't even let an egg pass their doorstep, in any form, and all cakes were baked on-site, just to be sure.

We had a kid yesterday who brought these smartie and sultana biscuits sandwiched together with chocolate icing, each in an individual box. We didn't give them to the kids because we couldn't control the portions and some kids really DO go batty on too much sugar or chocolate. The child was devastated.
Meanwhile, two weeks earlier, we had a little guy in with an un-iced sugarless banana cake and his three candles. He was still proud as punch, his friends still loved it, and we were all happy as the ones who had to supervise them for the afternoon.