Preheat the oven to 170°C.
In a bowl, mix the flour, baking powder, and salt.
In a different bowl, combine the butter, sugar, and lemon zest. Beat with a mixer until the mixture becomes fluffy, about 5 minutes. Add the eggs one at a time, beating them well. Pour in the vanilla extract and milk. Add half of the flour mixture and stir using a spatula, making circular motions. Add the blueberries and the remaining flour. Mix with the spatula.
Pour the batter into a buttered and floured rectangular baking pan of 11x25cm. Bake in the preheated oven for 50 minutes. Allow the cake to cool and then remove it from the pan.
For the frosting: In a bowl, combine the cream cheese, softened butter, and vanilla extract and mix with a whisk. Add the powdered sugar and continue mixing. Spread the mixture over the cake and decorate with blueberries and lemon zest.