My poor chihuahua needs your help!?

Maybe it's a "hot spot." I would put some A & D on it for a couple of days, and if that helps the redness, maybe he will be ok. On my poodle, I put some hydro-cortisone jelly on areas that she scratches, and if I can be persistent, it seems to work. I don't know that I'd put that on broken skin, though. Yes, a hot spot, especially when aggressively scratched, can lose it's fur.