Can you seamlessly switch between a .minecraft folder with mods and a .minecraft folder without mods?

Yes, but it's likely not necessary

Having two different .minecraft folders and switching them out does work, but is usually unnecessarily complicated. Assuming your modded version is not an FTB or Tekkit modpack, you can just use the vanilla launcher's profiles to differentiate the versions.

This is a little tricky to do by hand, since you will have to teach minecraft that your modded version is not the vanilla version (unless your modded version uses a different base version than your vanilla game, e.g. modded 1.7.2, vanilla 1.8). Chances are you will need Forge Mod Loader (FML) anyway. The FML installer does the ugly work for you by setting up a new "version" and a corresponding profile automatically. If not, see below.

Once you have a modded profile using the new version, I suggest changing the "Game Directory" entry of the profile to something else (e.g. ...\.minecraft\modded). This will move that profile's savegames (and some other stuff) to that folder. So you can't open vanilla worlds with the modded version, or (far worse) the modded worlds with the vanilla version.

Manual Version Setup

Detailed instructions can be found here (Credits to PorkyFish14).

1. Create a new profile with the correct Minecraft version
2. Start Minecraft to download the game files
3. Open the versions folder (.minecraft\versions)
4. Make a copy of the version and rename it to what you want
5. Rename all files under that folder to the same name as the folder, but be sure not to change their extension.
6. Open the .json file in a (good) text editor (such as Notepad++).
7. On the second line, change the ID to the name of the version (i.e. the folder name), leave the quotation marks. Save and quit.
8. Either mod your jar file, or replace it with your already modded jar file. Make sure the name still matches up with everything else!
9. Start the launcher, edit the profile you made, and choose the newly listed version.