For candied lemon zest: Remove zest from lemons with a vegetable peeler, keeping pieces long. Remove white pith using a paring knife, and finely julienne using a very sharp knife. Place julienned zest in a small bowl; cover with boiling water. Let stand for 30 minutes; drain.
Bring 1 cup sugar and the cool water to a boil in a small saucepan over medium-high heat. When sugar is completely dissolved, add julienned zest, reduce heat to medium-low, and cook for 10 minutes. Remove from heat, cover, and let stand overnight. Remove zest, and drain on wire rack. Roll in sugar. Dry on wire rack. Store zest in an airtight container for up to 2 weeks.
Preheat the oven to 350 degrees with rack in upper third. Lightly butter a 24-cup mini-muffin pan; set aside. In a food processor fitted with a steel blade, combine the flour and butter. Pulse until mixture is the consistency of fine crumbs. Add the sugar, egg yolk, vanilla, lemon zest, and salt. Process until evenly incorporated and smooth; do not overprocess.
Divide the dough into quarters. Divide each quarter into 6 pieces. Shape into balls. Place each ball in a muffin cup; press down in the centers so that the dough fits the cups snugly. Set muffin pan on a baking sheet.
Bake until lightly browned all over and slightly darker at the edges, 15 to 20 minutes. Transfer baking sheet with muffin pan to a wire rack to cool.
Make the filling: In an electric mixer fitted with the paddle attachment, beat cream cheese, sugar, egg, lemon zest, lemon juice, and vanilla until completely smooth. Using a 1/4-ounce ice cream scoop, fill the cooled crusts. Bake until filling is set and just beginning to color at the edges, 10 to 12 minutes. Transfer muffin pan to a wire rack. Garnish with candied lemon peel. Let cool completely before serving. The tassies may be stored in an airtight container, refrigerated, for up to 3 days.