Hi,
Please find the answers inline.
1) There is no effect so long as there are at least 3 disks online? No, it will go offline.
RAID 5 normally is ONE parity disk per array
RAID 5 == can survive the loss of ONE disk
RAID 6 -> can survive the loss of two disks
6 HDD and only 3 needed to work would be RAID 10, with a LOT of luck to disable the 'right' disks.
If you have multiple disk failures and your RAID-5 logical status is Offline, you must recreate the RAID-5 array by following these steps:
Step 1 
Enter the disk logical shutdown command in global configuration mode to disable the RAID-5 array.
Step 2 Enter the write command in EXEC mode to save the running configuration to NVRAM.
Step 3 Enter the reload command in EXEC mode to reload the system.
Step 4 Enter the show disks details command in EXEC mode to check the system configuration after the system is rebooted. At this point, the disks are not mounted and the logical RAID drive should be in the Shutdown state.
Step 5 Enter the disk recreate-raid command in EXEC mode to recreate the RAID-5 array.
Step 6 After successful execution of the previous command, enter the no disk logical shutdown command in global configuration mode to disable the logical disk shutdown configuration.
Step 7 Enter the write command in EXEC mode to save the configuration to NVRAM.
Step 8 Enter the reload command in EXEC mode to reload the system.
Step 9 Enter the show disks details command in EXEC mode to check the system configuration after the system is rebooted. At this point, the disks should be mounted and the logical RAID drive should not be in the Shutdown state.
Step 10 Wait until the rebuild operation is complete. You can check if the rebuild operation is complete by using the show disks details command in EXEC mode. The physical drive state will be Online and the RAID logical drive state will be Okay after the rebuild operation is completed.
2) I believe they are hot swappable, so I just need to insert the new HDD and it will resolve the issue?
Supports hot-swapping of the WAE-7341 and WAE-7371 hard disk drives after the failed drive is properly shut down. (For the disk removal and replacement procedures for RAID-1 and RAID-5 systems, see the Cisco Wide Area Application Services Configuration Guide, Chapter 14.)
http://www.cisco.com/c/en/us/support/routers/wide-area-application-services-waas-software/products-installation-and-configuration-guides-list.html
Select your version and then look in ch 14.
Hope this helps.
Regards,
Abhishek
CCIES 35269
