Preheat oven to 350 degrees and line 18 muffin cups with cupcake liners.
Using an electric mixer, beat cake mix, watermelon puree, egg whites, vegetable oil, and rum on low speed until mixed together. Increase to medium speed for 2 minutes. Turn back to low speed and add in red food coloring. Stir in chocolate chips.
Divide batter between muffin cups and bake 16-20 minutes, until a toothpick inserted in the center comes out clean. Let cool.
To make frosting, beat butter and cream cheese with an electric mixer until smooth. Add extracts.
With mixer on low, gradually add in powdered sugar. Turn mixer to high and beat until smooth.
Turn back to low-speed and add green food coloring and milk. Turn to medium speed just long enough to get food coloring mixed in well.
Frost cupcakes using an offset spatula or pastry bag.