Preheat your oven to 350°F (175°C) and line a standard muffin tin with paper liners. This ensures your cupcakes won’t stick and makes for easy serving.
Prepare the streusel topping first by combining flour, brown sugar, oats, cinnamon, and salt in a medium bowl. Cut in the cold butter using a pastry cutter or your fingertips until the mixture resembles coarse crumbs with pea-sized pieces. Refrigerate while preparing the cupcake batter.
In a medium bowl, whisk together the flour, baking powder, salt, cinnamon, and nutmeg until well combined. Setting this aside ensures even distribution of leavening agents and spices.
In a large bowl, cream together the butter and sugar using an electric mixer on medium speed until light and fluffy, about 3-4 minutes. This incorporates air into the batter for lighter cupcakes.
Add eggs one at a time, beating well after each addition, then mix in the vanilla extract. Make sure each egg is fully incorporated before adding the next for proper emulsion.
Gradually add the dry ingredients to the wet ingredients, alternating with the milk, beginning and ending with the dry ingredients (three additions of dry, two of milk). Mix on low speed just until combined after each addition.
Gently fold in the diced apples using a rubber spatula. Don’t overmix – this will ensure your cupcakes remain tender.
Divide the batter evenly among the prepared muffin cups, filling each about 2/3 full. This gives the cupcakes room to rise without overflowing.
Sprinkle the streusel topping generously over each cupcake, gently pressing it into the batter slightly so it adheres during baking.
Bake for 22-25 minutes or until a toothpick inserted into the center comes out clean with just a few moist crumbs. The streusel should be golden brown and slightly crisp.
Cool the cupcakes in the pan for 5 minutes, then transfer to a wire rack to cool completely before frosting.
While the cupcakes cool, prepare the frosting by beating together cream cheese and butter until smooth and creamy. Gradually add the powdered sugar, then mix in vanilla, cinnamon, and salt until well combined and fluffy.
Once cupcakes are completely cool, pipe or spread the cinnamon cream cheese frosting on top of each cupcake, leaving some of the streusel visible around the edges for visual appeal.