Prepare the Filling: In a large mixing bowl, beat softened cream cheese and butter until smooth. Add powdered sugar and mix until well combined. In a separate bowl, whisk together the milk and instant pudding mix until thickened. Combine the pudding mixture with the cream cheese mixture, then fold in the Cool Whip until smooth.

Assemble the Layers: Crush the Oreo cookies, including the filling, to your desired consistency. In a 9x13-inch glass baking dish, spread half of the crushed Oreos evenly on the bottom. Gently spread the pudding mixture over the Oreo layer, then top with the remaining crushed Oreos.

Chill: Cover the dish with plastic wrap and refrigerate for at least 2 hours, allowing the layers to set.

Decorate: Before serving, garnish the top with pastel M&Ms and arrange marshmallow Peeps as desired for a festive touch.