I get this similar rash on both of my nipples/arrealoa and it itched like mad. I have to use cortizone cream, but then it comes back in a few days.
Perhaps it is parisitic or fungal? I have used a parastitic tincture on my rashes on my face and nipples and it burns for a few minutes and then it goes away, meaning the skin rash is gone and all signs of it too, like it was never there. I know you can use this stuff for genital treatment. www.sbherbalremedies.com sells this stuff if you are interested it is the Clarkia product.
I don't know if this will help you, but good luck~!