In a saucepan over medium heat, combine the cubed peaches, ½ cup granulated sugar, and lemon juice. Cook for 12–15 minutes, mashing the mixture occasionally until it thickens and bubbles. Stir together the cornstarch and water, then mix into the bubbling jam and cook for an additional 2 minutes. Transfer the filling to a bowl to cool completely before using.
In a small saucepan, combine water and flour, whisking together over medium heat. Continue stirring for 4–5 minutes until the mixture thickens into a paste-like consistency. Transfer it to a bowl and allow it to cool.
In the bowl of a stand mixer, combine 3½ cups all-purpose flour, ⅓ cup granulated sugar, 2 teaspoons instant yeast, and ¾ teaspoon fine sea salt. Pour in the milk, add the egg and vanilla extract along with the cooled flour paste. Mix on low speed until a shaggy dough forms, then gradually incorporate 4 tablespoons softened butter. Knead on medium speed for about 10–11 minutes until the dough is smooth and elastic.
Shape the dough into a ball and place it in a greased bowl. Cover the bowl with a damp cloth and let it rise in a warm place for about 1 hour, or until doubled in size.
Prepare the crumb topping by combining melted butter, ¼ cup all-purpose flour, brown sugar, and ground cinnamon in a bowl. Mix until crumbly and set aside in the refrigerator.
After the dough has risen, turn it out onto a floured surface and roll it into an 18×15-inch rectangle. Spread the brown sugar filling evenly over the surface, then layer with the cooled peach jam and thinly sliced peaches. Cut the dough into 12 strips, each approximately 1½ inches wide, and roll each strip tightly to form rolls.
Place the rolled cinnamon rolls into a parchment-lined 9×13-inch metal baking dish. Cover the dish with a clean towel and let the rolls rise again for about 1 hour, or until they have doubled in size.
Preheat your oven to 325°F (162°C). Once the rolls have risen, sprinkle the chilled crumb topping over them. Bake for 30 to 35 minutes, until golden brown on top. Allow to cool slightly before serving.
While the rolls are baking, prepare the frosting by mixing softened cream cheese and butter until smooth. Gradually add powdered sugar and drizzle in heavy cream until silky and drizzle-able.
Once the rolls are out of the oven and slightly cooled, drizzle the prepared frosting over the top and serve warm.
Notes
For the best flavor, use ripe peaches and don't rush the rising time for fluffy rolls.