I don't know whether it would work using horizontal nipples. As for the shut-off valve, it's there to make it easier to remove the bucket for cleaning. Put the coupling between the bucket and the valve, shut the valve and unscrew the coupling. As far as I know, this maintains the water pressure in the pipe while the bucket is being cleaned. But I'm not sure. You could probably get by without the valve, though you do need the coupling so you can disconnect the bucket for regular cleaning.
This is my first year with chickens, and built my waterer just a month or so ago so there could be other reasons for the valve that I haven't discovered yet.
Jon