Yes, you can use them for all of your on board charges. This is how we pay for ours. A couple things to be aware of though: you can't apply gift cards to your on board account before the cruise. If you don't go to guest services at the beginning of your cruise, they could end up charging the credit card on file once you spend a certain amount. We assumed the charges wouldn't happen until the end of the trip so I didn't rush down there. They charged our card after the first $500. We ended up spending a lot more than we planned so it didn't matter but if you want to put all your on board spending on gift cards, make sure to visit the guest services desk right away.
Also, hang onto any gift cards you use. If for some reason you don't spend your whole balance or end up with a credit afterwards, we were told they have to put that credit back on the card it came from, that they can't issue new ones. So if the charges you're being refunded were paid for with 1 of your 12 gift cards, it will go back on that specific card. Don't throw any of them out until you're sure you will have no refunds or leftover credits. For this reason, it's easier to have your entire gift card balance on one card. If you do have multiple cards and time to combine them onto one card using something like the Disney Vacation Account, I would definitely recommend doing that.
Last, you can get the cards at a discount using the Target Red Card and at Sam's Club so if you plan to buy a lot of them, you can save a little extra going that route.