In a mixer bowl with a paddle attachment or by hand in a large bowl, beat butter, sugar and egg until mixture is fluffy and lightened in texture, about 2 to 4 minutes.
In a separate bowl, combine flour, baking powder, salt and nutmeg. Add dry ingredients and milk alternately to the creamed butter mixture. Do not overbeat. Mix just until the ingredients are combined.
Peel and core apples. Slice them into 1/4-inch wedges.
Spoon batter into the pan and level with an offset spatula.
Press apple slices, core side down into the batter, about 1/4-inch apart. Work the apple slices in a circular pattern like the spokes of a wheel.
Sprinkle cake with cinnamon sugar, if using.
Bake 35 to 40 minutes, or until a cake tester inserted into the center comes out clean. Set on rack to cool.
To make the hot cream sauce, combine cream, sugar, and butter in a medium saucepan and bring to a boil. Then, immediately reduce heat (to prevent scorching) and let simmer for 5 to 8 minutes until slightly thickened.
Sprinkle with icing sugar (if using). Pour hot cream sauce over warm apple Kuchen.