Preheat oven to recommended temperature on cake mix package. Grease and flour a 12-cup Bundt pan. In a large mixing bowl, combine dry cake mix with required oil, eggs and nutmeg. Omit water, and add the same amount of EggNog in its place. Mix and bake according to package instructions. When done, turn cake out on a wire cooling rack and cool completely.
To make EggNog glaze, combine powdered sugar, butter, vanilla, and 4 tablespoons of EggNog in a large mixing bowl. Beat on high speed until smooth, adding additional 1 to 2 tablespoons EggNog to achieve desired consistency.
Before serving, drizzle the EggNog glaze on top of the cake. Sprinkle colored sugar on top, if desired.