Hi Barry -
Bless your heart for giving a home to a homeless pet.!
A couple of things - most of the time when there are complications after a neuter it is for one of two reasons - either the pet is too active or else he is licking at the area. If he is really active, take steps to minimize this - leash walk only rather than just letting him out in the back yard until his incision is completley healed. Don't take for runs or play with other dogs for a while - I know this is easier said than done in some really active dogs, but it is important.
If he is licking at the area, you need to prevent this from continuing. Possible solutions would be to put icky tasting stuff around the incision (you can find this in pet stores or at a vet clinic). You could also get an E. collar (this is one of those cones that fit around their head so they cannot get to the incison) from a local vet ( and maybe petstore - I'm not sure about that so call first) - these need to be fitted properly, so if you go pick one up, take your dog with you so you can make sure it is the right size. You could also try puttint a T-shirt on him backwards - size will vary with the size of the dog, but you put the T-shirt on him so that the back legs are through the arm holes and the tail is through the neck hole, and then pull it up and tie it around his chest. You will need to take this off so he can urinate. Sometimes a combination of these things need to be done to prevent them from licking at an incision.
As far as cleaning with hydrogen peroxide, that is really not a good idea. It is okay to clean a wound once or twice with hydrogen peroxide, but this is a very harsh chemical and will kill normal cells (as well as bacteria cells) and can slow down the healing process. It is better to clean it with plan water a couple of times a day rather than peroxide. Using running water would be best - like if you have a hand-held sprayer in the shower and can run water over the incision for a couple of minutes twice a daily.
If you want, you could use a little over-the-counter antibiotic ointment on the incision as well, but know that putting ointment on an incision sometimes makes dogs want to lick at it even more as their instinct is to "clean that stuff off" so be sure to use the suggestions above to prevent this from happening.
How prominent the scrotal sac is after neutering will depend on things like the age and size of the pet and how large their testicles were prior to the neutring. Larger dogs that are mature can have a pretty significant empty sac after the neutering. If the sac is empty and flaccid or has just a little bit of swelling present, this is normal. If the sac is really swollen or discolored, there could more serious and should be checked out. As time goes by, the sac will atrophy and get smaller, as part of the healing process.
You may very well save yourself some time and money by having your dog checked out sooner rather than later and getting him started on oral antibiotics if there is an infection present rather than just trying to treat it topically. I believe most clinics are open today after the holiday, so even if your regular vet is taking an extended vacation, you may be able to find another vet who could help you out.
I hope this answers your questions. Please let me know if you need more information.