Preheat oven to 325°F (165°C). Grease and flour a bundt or tube pan thoroughly.

1. In a large bowl, cream together the softened butter, cream cheese, and granulated sugar until light and fluffy.
2. Add the eggs one at a time, beating well after each addition.
3. In a separate bowl, whisk together the flour, baking powder, and salt.
4. Gradually add the dry ingredients to the wet mixture, mixing just until combined.
5. Stir in key lime juice, zest, vanilla extract, and food coloring if using.
6. Pour the batter into the prepared pan and smooth the top evenly.
7. Bake for 75–85 minutes, or until a toothpick inserted into the center comes out clean.
8. Cool in the pan for 15–20 minutes, then invert onto a wire rack and let cool completely.
9. For the glaze, whisk together powdered sugar, key lime juice, and zest until smooth. Drizzle over the cooled cake and let set before serving.