Preheat oven: Preheat oven to 350°F (175°C). Line baking sheets with parchment paper.
Cream butter and sugar: In large bowl, beat softened butter and granulated sugar together using electric mixer on medium-high speed for 3-4 minutes until pale yellow and fluffy. Scrape down bowl sides halfway through.
Add egg and extracts: Add egg, vanilla extract, and almond extract (if using) to butter mixture. Beat on medium speed until completely combined with no streaks.
Mix dry ingredients: In separate bowl, whisk together flour, baking powder, salt, and entire package of strawberry gelatin powder until evenly distributed.
Combine wet and dry: Add dry ingredients to wet ingredients in two additions, mixing on low speed just until flour disappears after each addition. Do not overmix. Dough should look slightly rough.
Shape cookies: Scoop dough using cookie scoop or tablespoon (about 1 tablespoon each). Roll each portion between palms into smooth balls.
Create thumbprints: Place dough balls on prepared baking sheets, spacing 2 inches apart. Press thumb or back of teaspoon into center of each ball, creating depression about ½ inch deep. Twist slightly for smooth indentation.
Optional sugar coating: If using sanding sugar, roll dough balls in sugar before placing on sheets and making thumbprints.
Bake: Bake for 10-12 minutes until edges are set and lightly golden while centers remain soft. Cookies should look matte, not glossy.
Add Kisses: Remove from oven and immediately press one unwrapped Hershey's Kiss firmly into center of each warm cookie. Work quickly before cookies cool.
Cool: Let cookies cool on baking sheet for 5 minutes, then transfer to wire rack to cool completely. Dust with powdered sugar if desired before serving.