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It sounds like you're dealing with skin allergies. It could also be fleas, so that should be ruled out. If she's not on a monthly flea preventative, then she should be on something.
If it's allergies, then you need something to calm them down. I usually go with a combination of a steroid (Prednisone) + an antibiotic if the skin looks infected. It does sound like there is also a secondary skin infection. You will have to go to a vet for these meds after an exam.
For the itching. you can use an over the counter anti-histamine. Benadryl (Diphenhydramine) is the most commonly used. The dose in dogs is 1-2 mg per lb body weight. It can be given every 6-8 hours, as needed.
I hope this helps, let me know if you have any other questions.