In a mixing bowl, combine butter with cream cheese until pale in color. Add in sugar, salt, and vanilla extract. Blend until fully combined.
Add flour just until combined, do not over mix.
Place dough on a floured working surface and roll into a ball. Cut the ball into four and wrap each ball in plastic wrap. Chill in refrigerator for one hour.
While dough is chilling, make the filling. Combine brown sugar, cinnamon, raisins, and walnuts. Set aside.
After dough has chilled, remove the balls from the fridge. On a floured work surface, roll each ball of dough into a 7-inch circle. Spread about 2 Tablespoons of orange marmalade onto each circle. Sprinkle about 1/2 cup of the walnut mixture on top of each circle. Cut the circle into 12 wedges. Roll each wedge up starting with the widest side to the point.
In a small bowl, whish egg with water for an egg wash. Set aside. Also combine granulated sugar with cinnamon. set aside.
Preheat oven to 350 degrees F. Line cookie sheet with parchment paper.
Place wedges on cookie sheet. brush with egg wash then sprinkle with cinnamon sugar mixture.
Bake rugelach for about 15-18 minutes, until lightly golden brown. Remove from oven and cool completely.
Notes
Rugelach can be round or crescent-shaped, and it is often baked in a spiral so that each piece has a bit of all the fillings. When made correctly, rugelach is flaky and delicate, with a rich flavor that comes from the combination of the cream cheese dough and the sweet filling.
Storage. Keep rugelach in airtight container in refrigerator for up to 5 days.