My big question is, do you think I have any chance of taming him???
I don't see why not!

Sounds like you've already been working on gaining his trust!
Should I get his wings clipped and if so when?
As mentioned, clipping his wings is "anti-trust". Clipping can be considered a form of flooding while training, and if you train a bird improperly, then when the bird has their wings again, they become "untamed". If you tame them properly, they'll remain tame, regardless of clipped or flights. In 2007, I worked with a family of tiels that had previously been given to me. The male (father) was the most skittish cockatiel and very untrustworthy of humans. I never clipped him, but it started with his daughter (after she watched me feeding 5 adult, flighted, untamed budgies). All I was doing was feeding them by hand first thing in the morning before giving them food for the day. I did this every day.
Although the male is not tame (that was not my goal), he is no longer the skittish bird he once was, and is one of the first tiels, if not the very first, to come flying to my hand for food, when offered, even if I haven't fed them by hand for *months*! My lesser skittish tiels that aren't tame/friendly are more unsure of it if I haven't worked with them for a while.
I also read on the internet somewhere that I shouldn't train him inside the cage.
Please be honest with me.... what do you consider you've been doing all this time with him?!?!?!? LOL Sounds to me like training him inside the cage has been working well!
Here's some different bathing techniques you can try....

(although most tiels seem to prefer a mist/sprayer type bath or a large dish of water, maybe with vacuum running? Or try finding a video of tiels bathing?)
- Try luke-warm water
- Try cold water
- Try ice-cold water
- Try a spray bottle
- Try a plant mister
- Try in the sink with the water running or just some water in the bottom
- Try in the sink with the sprayer
- Try in the tub with some water in the bottom
- Try a casserole dish or similar with some water
- Try the dish with ice
- Try the dish with foot toys
- Try the dish with some small rocks or pebbles
- Try the dish with some leafy greens like endive or other types of lettuces that may create a "natural" bowl
- Try the dish with a vacuum cleaner running
- Try in the shower with you - watching you having a blast getting wet!
- Try dancing the bird into the shower with the water already going
- Try spritzing yourself, and have fun doing it! Then spritz the bird
- Try outside in an empty cage large enough to spread wings during a nice rain shower
- Try outside in an empty cage using the hose with a mist/shower attachment
- Try playing videos of other birds bathing
How often do they need a bath?
Technically, they don't "need" a bath, but it is healthy for their skin, feathers and mental health. Bathes can be given as frequently as daily to a few times a month. If birds really enjoy it, daily is ok! If they don't, try not to force them to bath, but do try different ways of trying to get them to bathe. The last thing you want to do is to make the bathing experience a bad experience.
Whats this stuff they sell at the pet stores? Any good, or is water better?
Stay away from it. Water is best.
I'm thinking I should just start out getting him to eat out of my hand and then step up inside the cage first. Do you agree? Or will he have been cage bound for too long?
I'd say this would be a great start! Although you might want to consider making your hand an extension of a perch, or perhaps an extension of the cage itself.... i.e. have your hand at the end of a perch, on top of the cage, right next to the cage but level with the top, or level with the bottom of the door. Reward him for looking at you, reward him for moving towards you, reward him for touching you with a toe, reward him for putting a foot on you and if he puts both feet on you, JACKPOT REWARD!!!!
To see more of what I did with my tiels, check out this thread.
"Self-Tamed" Cockatiels | Avian Avenue Parrot Forum