I just taught this in my undergraduate topology class (in the topological category), and in fact I usually give a version of this as a homework exercise (with hints).
The idea is to define connected sum along the coordinate balls, i.e. the balls that are mapped via coorinate chats to standard balls in $\mathbb R^n$. For such balls the argument is easy, and no annulus theorem is needed. For notational convinience let's write a coordinate ball as $B_x$ where $x$ is the point in $M$ that cooresponds to the center of the corresponding ball in $\mathbb R^n$. Fix $y\in M$ and consider the subset $Y$ of $M$ consising consisting of points $x$ such that there is a homeomorphism of $M$ taking $B_x$ to $B_y$. It is easy to show that $Y$ is open and closed (the point is that given two metric balls in $\mathbb R^n$ there is a homeomorphism that maps one ball into the other one, and is the identity outside a compact set; such a homeomorphism can be constructed with bare hands, and this is where the work is). Thus if $M$ is connected, then $Y=M$. The same argument shows that any two coordinate balls are ambiently isotopic.
