Don’t worry if you have a lot of questions about this game. I am also a relatively newer player (since Halloween last year).
First of all, there are three types of damage in this game: Normal, Fantastic, and TRUE. Normal Damage targets an enemy’s armor, Fantastic Damage targets an enemy’s Reality, and TRUE Damage will always do its full damage to every enemy regardless of their defenses. Most units do either Normal or Fantastic damage.
Although you don’t necessarily HAVE to use a team of just Normal or just Fantastic damage, it can sometimes help to focus on one (usually Fantastic Damage since most units tend to have lower Reality than Armor, with some exceptions).
Mushu certainly isn’t a bad choice for that team, and you’re right that he synergizes very well with Disgust. The reason I suggested LSB is because they will be more beneficial to the team you currently have as a whole. Their Green Skill can lower enemies’ Reality, allowing Disgust, Ian, and Cheshire Cat to all do more damage, and their Blue Skill can Scare enemies, which would allow those 3 to crit and do EVEN MORE damage against enemies.
If, however, you did want to try using Mushu and Disgust on a team together, you certainly could. Silences, and just disables in general, are very useful in the meta. In that case, I would recommend using Sadness and Angel, as they both also benefit from Silences. Sadness is an excellent tank, and Angel can really help your team’s survivability.