The stripped threads can be tapped for a larger size and then either an insert can be used to bring the thread size back to original so that the original drain plug can be used or the larger thread size can be used to accommodate a larger thread size drain plug. There are probably even kits for this.
I'm a recently retired machinist and if a neighbor had this problem I would advise using some sort of thread insert, assuming that the stripped threads are in aluminum. Because you don't want metal debris in your transmission I suggest using some sort of very thick cutting lubricant. If you are tapping either aluminum or cast iron you can use the same lubricant. Lard that is thinned slightly with kerosene. Lamp oil is a good substitute for kerosene. The cutting lubricant needs to hold onto the metal chips generated from the drilling and tapping operations. The drilling will most likely pull the chips out of the hole but the tapping operation probably will not.
So, on to tapping. There is no way for me to know what kind of tap you will be buying if you decide to tap the hole larger, so I will tell you what I think is the best way to keep the metal chips out of your transmission. Apply the very thick cutting lubricant to the tap. Fill the flutes. Then start tapping, BY HAND, the hole you just drilled. Run the tap into the hole only a couple turns. Back it out and clean the tap. Apply more thick lubricant and repeat the operation. I know, this is slow going. But the thick lubricant will catch the metal chips and keep them out of your transmission.
I have used this method myself more than once and it works well. And interestingly, generally, cast aluminum and cast iron both form similar shaped chips when being tapped. And to reiterate lard mixed with kerosene makes a good cutting lubricant for both materials.
Eric