Marketing Cloud is currently connected to a sandbox. And we're planning to move the connection to the production org. What would be the best way to do this? What will happen to the currently synced data when we "Disconnect Account"?
There is no migration path for moving the connector from a sandbox to production ORG. You will need to repeat the setup process provide online. You are basically migrating to a new ORG.
Additionally, data synchronization in Marketing Cloud will need to be re-provisioned. I believe customers can now manage this process themselves from the Salesforce Integration page in Marketing-Cloud. However, you may need to contact support to do this in instances where you are moving ORGs.