The air flow created by the balloon causes a cushion of moving air between the disc and the surface. This lifts the CD and reduces the friction which allows the disc to hover freely. Large scale hovercraft are capable of traveling over land, snow and water.
The project above is a DEMONSTRATION. To make it a true experiment, you can try to answer these questions:
1. Does the size of the balloon affect the CDs ability to hover?
2. Does a helium balloon work better than an air filled balloon?
3. Do larger discs make better hovercrafts (plastic picnic plates, old record albums) ?