Preheat oven to 350°. Butter and flour 9-inch cake pan. Spread walnuts on sheet pan and toast in preheated oven 6 minutes. Cool and rub nuts in towel to remove loose skins. Grind nuts in food processor with 1/2 cup of the flour until very fine. In medium bowl, combine ground nuts, remaining flour, baking powder, and salt. Reserve.
In standing mixer with paddle attachment (or with hand mixer), beat butter with honey and sugar until light and fluffy, about 3 minutes. Scrape down sides of bowl. In small bowl, beat eggs lightly with orange zest and vanilla. Add it in thirds to butter mixture. Beat well to incorporate after each addition. Scrape down sides of bowl. Add dry ingredients and mix until fully incorporated. Spread batter evenly in prepared cake pan. Bake in preheated oven 35 to 40 minutes, until toothpick inserted into center comes out clean.
While cake is baking, toast ten walnut halves on sheet pan 8 minutes. While they are still warm rub nuts in towel to remove excess skin and place in small bowl. Add 2 tablespoons honey and stir until walnuts are coated. Reserve walnut halves at room temperature to garnish cake when finished.
Cool cake in pan 5 minutes and then turn out onto cake rack to cool. Garnish edge of cake with walnut halves.