Preheat oven to 400°F and line a baking sheet with parchment paper.

In a bowl, beat cream cheese and sugar on low speed until smooth. Add egg yolk, vanilla, salt, and lemon juice. Mix just until combined. Set aside.

Slice drained peaches into 1/4-inch thick slices if needed.

Lightly dust parchment paper with flour. Place thawed puff pastry on top and roll slightly to smooth and flatten.

Spread cream cheese filling down the center third of the pastry lengthwise, leaving a 1-inch border at the top and bottom.

Arrange peach slices evenly over the cream cheese layer.

Trim top corners and cut notches at the bottom if desired. Using a knife or pizza cutter, cut 1-inch diagonal strips down both sides of the pastry, leaving about 1/2 inch before reaching the filling.

Fold strips over the filling alternately from each side to create a braided pattern.

Whisk egg and water together to create egg wash. Brush over pastry and sprinkle with coarse sugar.

Bake for 25–28 minutes or until golden brown and puffed.

Allow to cool to room temperature. Mix powdered sugar and milk, then drizzle glaze over the danish.