Observed the cake appears quite plain (7)
I believe the answer is:
noticed
'observed' is the definition.
(noticing is a kind of observing)
'the cake appears quite plain' is the wordplay.
I cannot quite see how this works, but
'the' could be 't' (the is pronounced as a 't' sound in some dialects) and 't' is found within the answer.
'cake' could be 'ice' (I have seen 'Top cake' mean 'ice' so perhaps 'cake' could also mean 'ice') and 'ice' is present in the answer.
The remaining letters 'nod' is a valid word which might be clued in a way I don't see.
This explanation may well be incorrect...
Can you help me to learn more?
(Other definitions for noticed that I've seen before include "Spotted" , "Detected" , "regarded" , "Became aware of" , "remarked" .)