I know there are JB solutions, but is there a way to use the Lightning to USB (Camera) adapter to read and play video files off of a flash drive?
Your method requires Cydia, which requires jail breaking.
The article refers to an sd card, but it shouldn't be any different to the usb drive, aside from the added hassle of getting around the power limitation.
Since you don't have a jailbreak, you will have to import the videos from usb drive. This will take a while depending on the video. There is no way to watch things straight off the usb drive, that requires jailbreaking.
You have to rename the video so the ipad thinks it's a 'home movie' and since you have to have it in a format the ipad can play natively, you might also need to convert the video.
IMHO, far to much hassle to even bother doing and you'd be better off looking at the alternatives (portable hard drives with built in hot spots etc).