Separate hard candies by color into zip-top bags; crush with rolling pin. Make sugar cookie dough from mix, following cut-out cookie directions. Wrap half in plastic wrap; refrigerate. Roll out other half on a floured surface to 1/4 inch thick. Cut out cookies with 3-inch ornament cookie cutter; transfer to greased baking sheet. Poke a hole in the top of each and add details with a toothpick. Using 2-inch letter cookie cutters, cut out a letter from each; fill with 1 tsp. crushed candy. Bake according to package directions, then thread the hole with string and sprinkle with sugar. Let cool, then transfer to a wire rack. Repeat with remaining dough.