|Could it be eczema? DD has sensitive skin, but not allergies. The combination of dampness and friction made her diaper area totally rashy. The rash worsened to look like sores, and it slowly spread until we realized the cause. I never had her skin rub off, but I imagine it would have gotten that bad if we hadn't found a treatment that worked. The exzema rash didn't show up until DD started to be more mobile, so that could explain a "new" sensitivity in your LO. Switching to disposables did NOT clear up the problem for us: she just developed a new rashy area at the disposable's bindings. Incidentally, she got a milder version of the eczema rash on her belly when she began scooting and under her arms when she started crawling.
Our initial treatment was an over-the-counter cream on the rash--can't remember the name, but it was recommended by our pediatrician's nurse over the phone. I applied it several times a day for a week or so. I also applied a thin layer Eucerin all over the rashy areas every morning and night. In a couple of weeks the eczema rash had completely cleared up. As long as I continue to use the Eucerin her skin stays healthy, so I made lotioning her entire body part of her bedtime routine. For her occassional flair-up, I add another application of Eucerin on the red spots in the morning and/or midday during a diaper change.
You can find lots of info about eczema online, including photos. It is supposedly very common in babies and most outgrow it before adulthood. Aquafore is another common treatment. I prefer Eucerin because it is an excellent moisturizer that I can use on myself, too, whereas Aquafore felt like petroleum jelly (Vaseline).