Preheat oven to 350° F. Line a muffin tin with cupcake liners. Set aside.
Whisk together flour, sugar, nutmeg, baking powder and salt in a large mixing bowl. Set aside.
In a large bowl with a hand mixer or a stand mixer fitted with a paddle attachment, beat together butter, egg whites, vanilla, eggnog and milk and on medium speed just until smooth. Slowly add in flour mixture and mix just until combined. Do not over mix.
Fill prepared cupcake liners two-thirds full. Bake 15 to 18 minutes or until a toothpick inserted in the center comes out clean or with a couple crumbs on it. Allow to cool for 1-2 minutes, then remove to cooling rack to finish cooling.
In a medium bowl with a hand mixer or a stand mixer fitted with a paddle attachment, beat butter until fluffy. Gradually add confectioners' sugar until combined. Add 1 tablespoon eggnog and 1 teaspoon bourbon. Add additional eggnog or bourbon to reach desired consistency and taste. Transfer frosting to a bag fitted with a tip.
Brush cooled cupcakes with bourbon (optional step). Frost cupcakes and sprinkle with nutmeg.
Store cupcakes at room temperature in an airtight container. Cupcakes are best served the day they are made, but can be eaten up to 4 days after baking.