there are a ton of bakeries popping up in Santiago --- it's cool to cook, and lots of young, newly married girls are trying their hand at selling sweets: mini cheesecakes, cookies, petit-fours, etc... Some of it is delicious and ugly, some is beautiful and gross.
Fifa is "The" place to get cakes in Santiago. I don't like their cakes - too sweet, but my wedding cake came from there, and it was gorgeous. The bottom three of the five layers was camoflauge --- tapistry foam covered in real icing/decor.
Mari's cakes is the new "it" place - i think they do pizza, too.
I think the place SantiagoDR (hey, doN!) Is panaderia cibao, which was practically next door to fifa's and is still there... I don't think they do fancy cakes, but they have a chocoalate-iced brownie that is to-die for.
And yes, cake is a big deal! Can't have a birthday without the cake!!!!! And a lot of times the cake isn't even real - it's just foam, decorated with icing... and the sheet cake out back gets cut up. The cake is a photo prop.