Making the dough: Beat the butter and sugar together in a bowl. Add the egg yolk and vanilla extract and beat the mixture until it is smooth. Next, add the flour and salt and mix everything together to form a smooth dough. Mold the dough into a ball, wrap it in plastic wrap, and refrigerate for 30 minutes.
Preheat the oven to 350˚F. Roll out dough to 1/4 inch thick on a lightly floured surface and cut out circles with a 2 1/2 inch fluted round cookie cutter. Re-roll the trimmings until you get approx 40.
Place half the circles onto prepared baking sheets and cut out the centers using a small 3/4 inch heart-shaped cutter. Place the remaining circles onto baking sheets and leave these whole.
Bake the cookies for about 12 minutes or until golden. Leave for a few minutes then transfer to a wire rack to cool completely.
Make the butter frosting by beating the butter until smooth, then gradually beating in the powdered sugar, water, and vanilla extract. Spread frosting over the whole (not heart) cookies.
Now spoon on the jam. Drop a small spoonful of jam on top of the butter frosting. Put the heart cookies on top. Now eat them -- yum!