Yes or no, depending. Cache yes, moves data from cache pool to array, as long as the data is not in use or open. Cache no, mover does nothing. The help text on the share page should help clarify this.
Most secure would be to upgrade parity drives one at a time, doing parity checks after each upgrade.
Then use the better of the two old parity drives to upgrade disk1, once again doing a parity check after the upgrade is complete.
COPY the data from disk2 to the new disk1.
Upgrade disk2 to 16TB, once again parity check after the operation is complete.
Format disk2 to clear it out, change desired format type, format it, then change it back, format again. Takes a few minutes each, not long at all.
COPY the contents of 3,4 and 5 to disk2.
Set a new config, preserve all, then set 3,4 and 5 to none, build parity again, check parity again.
If you follow this exactly, you will end up with all your data where you requested, and none of your original data drives will be overwritten, they can stay intact as backups.
For ZFS questions, my best answer is wait until it's been live for a few months, ZFS itself is fine, but the Unraid integration could have teething problems, best to wait and let the bold take the risks.