No, that's not the thermostat
and it's a good thing that you didn't get that to turn!!! That looks like the drain!!! You'd have had hot water all over your floor!!!
Hmmm.......Is your hot water heater an electric one? Or is it gas? Here's some sites that might give you some information. Neither Glen nor I are familiar with an electric water tank. I hope this helps.
http://homerepair.about.com/od/plumb...lsht_hwh_3.htm
http://www.handymanwire.com/question...erheaterq.html
http://www.diy-hq.net/water-heaters/...u-can-fix.html
If you have an electric tank--
http://www.chilipepperapp.com/troublee.htm