At what point is it wise to replace a disk which is possibly failing? And how do you tell?

When you no longer trust it. All remaining disks must be read flawlessly to reconstruct a failed disk, so if another disk you don't suspect of failure fails, then you are relying on a disk you don't trust to rebuild it.

As far as how to tell? That's part intuition and part analysis. All disks will fail eventually given time, the gamble is waiting until the last moment. Increased re-allocated sectors that happen recently and the count continues to increase, that disk is very likely to die soon. Nobody can predict the future perfectly, so you just have to use your best judgement, analyze the SMART numbers for that specific manufacturer.

Some people have a very low tolerance for risk, and replace drives as soon as they show any sign of trouble. Some people like to live dangerously, and wait for a drive to actually get dropped from the array to replace it.

In any case, drive redundancy and the ability to replace a failed disk does not mean you don't need backups of anything you don't want to lose. There are MANY ways to lose data that don't involve hard drive failure.