I love, love, love your cake! I must admit, when I saw the headline I was a lil judgy in thinking "spooky cake for a 2yr old??" but it is so cute! Not all that spooky, especially the bears I've been making fondant cakes this past year and watching hours (sometimes days) of work destroyed in 10secs is a little heartbreaking. If the recipients weren't so admiring I am not sure I could keep doing it lol Have you found a place for the bears?
You asked about fondant. I started with marshmallow fondant and found it to be a sticky mess (and I wasn't keen on the sickeningly sweet taste), I tried another recipe which had no elasticity and finally, I have settled on http://www.cakecentral.com/recipes/7446/michele-fosters-fondant She says cream in the ingredients, milk in the recipe. I have used both at different times with no noticeable difference. This makes around 3kg of fondant (I must admit to not really measuring the icing sugar, I just keep adding until I get the right consistency). I have made this without a mixer and it takes a lot of kneading. With a mixer, it's just lovely It does have a creamy colour, so to get white food gel is a must. It's not disgustingly sweet and has quite a pleasant taste. I roll it quite thin (less than 0.5cm) as I don't like mass amounts of fondant and it holds up well when lifted after being loosely rolled around a rolling pin, and by adding some Tylose I have also dried figures from it though it takes days (and no humidity). Hope that helps and that you find a fondant recipe you like
Edited to add: I have stored the Michele Foster's Fondant (known as MFF around the web) for well over 1mth wrapped in cling film and put in an air tight container and it's just fine.