For the vanilla cupcakes:
1) Preheat oven to 140C/Gas 4. Line two 12-cup cupcake tins with paper liners. (To avoid cupcakes sticking if they overflow slightly, lightly spray the tops of the pans.) Put tins on a baking sheet. Set aside.
2) Process sugar and butter in a food processor until very creamy, scraping sides as needed, 1 to 2 mins. Add the eggs and yolks, one at a time, pulsing after each addition. Add the milk, water, and vanilla and process to blend.
3) Whisk both flours, baking powder, and salt in a medium bowl. Add the dry ingredients, in 3 batches to the wet, pulsing, and then scraping batter off the sides of the processor as needed after each addition. Process until the batter is very smooth and pourable like pancake batter, about 2 mins.
4) Evenly pour the batter into the prepared cups, filling them 3/4 of the way full. Bake until the cakes are just firm and spring back when gently pressed, and the tops are golden, 18 to 25 mins. Cool slightly in tin, and turn out of tin when cool enough to handle. Cool cupcakes completely on a rack before frosting.
For the white fluff icing:
1) Whisk the milk and vanilla essence together in a small bowl.
2) Slowly beat the butter and sugar, in another medium bowl, with an electric mixer until incorporated. Raise the speed to high and mix until light and fluffy, about 5 to 7 mins. (Occasionally turn the mixer off, and scrape the sides of the bowl down with a rubber spatula.) Add the fluff and salt and reduce the speed to low. Add the milk and vanilla mixture, scrape the bowl down, and mix until fully incorporated. Raise the mixer to high and beat briefly until fluffy, about 1 to 2 mins. Ice cupcake immediately.