I do cringe when I hear of people carrying large amounts of cash or Disney Dollars to WDW with them. If they are lost, stolen or destroyed, you're out of luck. If you take travelers checks instead, they can be replaced.
Yes you can. We were given a large amount of Disney dollars on our last trip as a gift. I did not want to wait till the end of our trip to pay all those dollars so I paid them on our account at check in. It just showed as a credit till we used them all. it worked great.