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A normal healthy dog does not have a need to lick the penis so there is likely something is going on that needs testing. It may be a urinary tract infection, bladder stones or penial infection. Licking will make it worse because of the bacteria a dog's mouth has. Blood in the urine can be an indication of a UTI or stones. It is suggested you get a hands on exam and maybe drop off a urine sample to the Vet.
this link goes over other health reasons for licking