I never thought about the Target card and Disney Gift Cards ... not to hijack your thread, but we've got a trip to F&W planned a month from now. I'm wondering:
1. Do you really save 5% on gift cards ? Most stores exempt anything with "cash value" from such discounts.
You do. You do not save 5% on Target gift cards or the Visa-type gift cards, but all others are coded as "Entertainment" so you will get the discount.
2. If so, is there a limit ? If I knew my wife and I would need around $500 for our 4 days passes for the trip, could I buy $500 worth of gift cards and then buy the tickets at the ticket booth with the gift cards ?
The only limit is how many cards they have in stock and your Target credit limit. Yes, you could do that for your ticket purchase.
3. Likewise, if I bought a bunch of giftcards, could I then go down to Food & Wine and "charge up" a wrist band with the gift card values ?
You can not use one gift card to buy another so no, that won't work. You could, however, use the gift cards at the food booths or, if you are staying at a WDW resort, you could put the gift cards on your account and then put the booth purchases on your room charge.
I'm not usually one to worry too much about working the system, but saving 5% would be fantastic.... it just sounds too good to be true.