Preheat oven to 350°F (175°C). Grease and flour an 8x8 inch baking dish.

Prepare the rhubarb topping: In a medium bowl, toss the chopped rhubarb with 0.75 cup granulated sugar. In a small bowl, whisk together cornstarch and water until smooth. Pour this slurry over the rhubarb and toss gently to combine. Set aside.

Prepare the cake batter: In a medium bowl, whisk together flour, baking powder, and salt. Set aside.

In a large bowl, cream together the softened butter and 1 cup granulated sugar until light and fluffy. Beat in the eggs one at a time, then stir in the vanilla extract.

Gradually add the dry ingredients to the wet ingredients, alternating with the milk, beginning and ending with the dry ingredients. Mix until just combined; do not overmix.

Spread the cake batter evenly into the prepared baking dish. Spoon the rhubarb mixture evenly over the top of the batter. You don't need to mix it in; it will settle during baking.

Bake for 40-45 minutes, or until a toothpick inserted into the cake part comes out clean and the rhubarb topping is bubbly and slightly thickened.

Let cool for at least 15 minutes before serving. Serve warm, with whipped cream or vanilla ice cream if desired.