Toss the diced peaches with the lemon juice and cornstarch in a small bowl; set aside. The cornstarch will absorb some peach juices so the cake batter doesn't get soggy.

Preheat the oven to 350°F (175°C). Grease and flour a 9-inch round cake pan (or line with parchment).

In a medium bowl, whisk together the flour, baking powder and salt; set aside.

In a large bowl using an electric mixer, cream the softened butter and granulated sugar together on medium speed until light and fluffy, about 3–4 minutes.

Add the eggs one at a time, mixing well after each addition. Scrape down the bowl as needed.

Mix in the vanilla extract.

With the mixer on low, add half of the dry ingredients, then the milk, then the remaining dry ingredients, mixing just until combined. Do not overmix.

Fold the prepared diced peaches gently into the batter by hand so they are evenly distributed.

Pour the batter into the prepared pan, smooth the top, and tap the pan gently on the counter to release any large air bubbles.

Bake in the preheated oven for 30–38 minutes, or until a toothpick inserted in the center comes out with a few moist crumbs (not wet batter) and the top is golden.

Remove from the oven and let the cake cool in the pan on a wire rack for 15 minutes, then invert onto the rack and allow to cool completely, about 1 hour.

Cream Filling

While the cake cools, make the cream filling: in a medium bowl, beat the softened cream cheese with an electric mixer until smooth and free of lumps, about 2 minutes.

Gradually add the powdered sugar and vanilla, beating on low until incorporated, then increase speed to medium and beat until smooth.

With the mixer running on low, slowly pour in the heavy cream, then increase speed and whip until the mixture holds soft peaks and is spreadable but still light, about 1–2 minutes. Chill briefly if too soft.

Assemble & Glaze

If the cake has domed on top, level it with a serrated knife to create an even surface. Slice the cake horizontally into two even layers using a long serrated knife or cake leveler.

Place the bottom layer on a serving plate or cake stand and spread about half of the cream filling evenly over it, leaving a small border at the edge.

Arrange a thin layer of fresh peach slices (reserve some for garnish) over the cream filling if desired, then place the top cake layer over the filling.

Spread the remaining cream filling over the top of the cake, smoothing with an offset spatula.

To make the peach glaze, combine the peach preserves, water and lemon juice in a small saucepan and warm over low heat, stirring, until the preserves melt into a smooth glaze, about 2–3 minutes. Strain if you want a very smooth finish.

Brush the warm glaze lightly over the top of the cake (and over peach slices if used) to give a glossy finish.

Chill the assembled cake in the refrigerator for at least 30 minutes to set the filling and glaze.

Finishing

Before serving, optionally dust the top lightly with powdered sugar and decorate with reserved fresh peach slices.

Slice with a sharp knife warmed under hot water and wiped dry for clean slices. Serve chilled or at cool room temperature.