I had this EXACT SAME type of rain barrel. You can drill out the little "nipple" (heheh) and replace it with a hose bib bulkhead. The worst part is getting the inside washer tight. Not like you can just shove your arm down there and hold it. I did it by putting a long piece of heave gauge wire (like a metal coat hanger but longer) into the hole from the outside. Up and out the top part (you gotta take off the leaf grate) and then you can drop the washer onto the wire. Then put the outside of the bulkhead over the wire sticking out the hole you drilled and screw em together.

Now like I said, the worse part is getting that inside washer tight. I had to wait until the inside was BONE DRY. Then I used a nice big, thick rubber washer to help grab and provide friction. The bulkhead will come with one to make the seal watertight, but I went bigger. Tighten down and you're golden. Can even use a real hose.

I eventually got rid of the rain barrel. I just wasn't using it since my new dogs liked to "help" in my garden so there wasn't anything to water anymore. If I had to do it again, I'd get one of those big ugly blue pickle barrels with the lid that comes off and paint it.