This is from the "Dining In" kosher cookbook; these cookies turn out really pretty. As a general rule, I hate working with dough that I need to roll, but I found this one very easy to deal with. I'm copying the recipe verbatim from the cookbook, but I really do not recommend mixing all the ingredients at once!! -- I did that and created a great big floury mess. It's probably a better idea to cream the margarine and sugar, and then alternate between gradually adding the flour and liquid ingredients.
As for crushing the lollipops, I put them in a freezer bag and whacked at them with a rolling pin... triple-bagging is probably a good idea! It would probably work to crush them in a food processor, too.
With the leftover dough from the cutouts, or if you just don't feel like cutting out shapes in the first place, you can make a "thumbprint" type cookie and fill the "wells" with the crushed lollipops.