Craft the chocolate into a chocolate bar.
Or you can use the chocolate to make an unbaked muffin
You can find salt ores at the bottom of the ocean.
Get Sugar Canes
You can use the chocolate to plant a chocolate plant.
If you did make a cupcake then pop it in the furnace and you got your baked cupcake.
If you didn't make a cupcake then put your muffin in a furnace and you got your baked muffin.
Crafting the tools and armor is easy because you just need to copy the Vanilla recipes but replace the material with the hardened sugar. But the sugar bow is now how you normally craft it. So follow the image above.
You can also use the sugar to craft food.
Put the sugar into a furnace and wait until it turns into hardened sugar.
You then can craft it into Salt Blocks.
This is an easier way of carrying all of your hardened sugar
If you want a cupcake instead, then add a bowl to the unbaked muffin.
Craft it into sugar