In a 2-quart heavy saucepan, whisk together sugar, cornstarch, and salt. Gradually whisk in eggnog and egg yolks until well combined. Set over medium-low to medium heat and cook, stirring constantly, until pudding bubbles and thickens. It is done when it coats a spoon, which should take about 5 minutes.
Remove pot from heat and stir in 1 teaspoon vanilla. Transfer pudding into a medium bowl, placing plastic wrap directly on the surface of the pudding (to prevent a skin from forming). Refrigerate until set, at least 3 hours.
Just before serving, beat chilled heavy cream at medium speed until soft peaks begin to appear. Sprinkle powdered sugar and remaining 1/2 teaspoon vanilla over the whipped cream and beat at medium-high speed until stiff peaks form (but do not overbeat or you will end up with butter). Divide pudding between four small glasses or bowls. Top with whipped cream and garnish with a sprinkle of nutmeg (or, if desired, you may garnish with holiday sprinkles).
For a spiked version, omit the vanilla extract in the pudding and replace with 1 to 2 tablespoons of bourbon or rum.