FOR CUPCAKES: PREHEAT oven to 375º F. Paperline or grease 24 muffin cups.
COMBINE flour, baking powder and salt in small bowl. Beat granulated sugar, butter and vanilla extract in large mixing bowl until creamy. Add eggs, one at a time, beating well after each addition. Gradually beat in flour mixture alternately with milk. Stir in 3/4 cup morsels. Spoon into prepared muffin cups, filling 3/4 full.
BAKE for 18 to 20 minutes or until tops spring back when lightly pressed. Cool in pans for 10 minutes on wire racks; remove to wire racks to cool completely. Frost; sprinkle with remaining morsels.
FOR FROSTING: MICROWAVE 1 cup morsels in a medium, uncovered, microwave-safe bowl on HIGH (100%) power for 1 minute; STIR. The morsels may retain some of their original shape. If necessary, microwave at additional 10- to 15-second intervals, stirring until smooth. Beat powdered sugar, butter, milk, vanilla extract and melted chocolate in small mixing bowl until creamy.