I would like to make this for kids. Is there a suitable substitute for the alcohol and can this be made intocupcakes??

Agree.
Or, for a bitter orange taste (as in the liqueur), use 1 tbsp of orange marmalade diluted in 2-3 tbsp water.
Yes on the cupcakes - basically all cakes can be made as cupcakes, with shorter baking time (about 15-18 minutes).