In a medium bowl, combine cranberries and sugar. Stir well and let sit for about 30 minutes to allow the cranberries to release some juices and sweeten.
After 30 minutes, blend the cranberry mixture briefly with an immersion blender or food processor until you have a chunky consistency (not a puree).
In a large mixing bowl, combine the cranberry mixture with the mini marshmallows, whipped cream, crushed pineapple, chopped nuts (if using), and vanilla extract. Gently fold everything together until fully combined.
Transfer the mixture to a serving dish or individual bowls and cover with plastic wrap.
Refrigerate for at least 2 hours to allow flavors to meld and the fluff to set.
Before serving, give the salad a light stir to fluff it up again, and garnish with additional nuts or a sprinkle of cranberries if desired.
Notes
For a lighter version, use low-fat whipped topping.