Hello, my name is***** and I have over 20 years of experience as a veterinarian. I'm really sorry to hear about Midnight's hairloss and excessive grooming of his back, which has not improved even with bathing and the use of fish oil.
The most common reason for these symptoms is flea allergy dermatitis. Flea allergy dermatitis is horrible. If you don't see any fleas you might not have a huge population. And in allergic cats there doesn't need to be many, it only takes one bite a month for an allergic cat to itch like crazy. If you have other pets who aren't itchy they may not be allergic. Ideally I recommend topical flea products be applied every 3 weeks during the summer/fall months in an allergic cat when fleas are at their peak, or with a active problem, and then monthly as a prevention. Fleas can thrive even in the winter in warm secluded areas like where he sleeps. Many over the counter products have a problem with fleas being resistant and some can be down right dangerous. I never recommend any products that Hartz or Sargent's make. I recommend Advantage II or Frontline Plus, or the new Seresto Flea collar. I don't normally recommend flea collars, but this one really works and lasts for at least 6-8 months. All of your pets must be treated as if you don't the nonallergic ones serve as a flea reservoir for the allergic one and you'll never solve your problem.
Inhaled allergies (to pollens, dust mites or mold spores) are another possibility.
To control allergic symptoms you can try:
1) Benadryl (diphenhydramine only, the combination products with decongestants and acetaminophen are toxic to cats) at 1mg to 2mg per pound of body weight every 8 hours. That's a half of 25mg tablet every 8 hours for a cat that is 8 to 15 pounds. Benadryl is very bitter tasting and some cats will drool excessively or even vomit after a dose because of the taste. If that happens just try another antihistamine.
2) Chlorpheniramine at a dose of 4mg per cat twice daily.
3) Zyrtec (Cetirizine hydrochloride) at a dose of 5 mg per cat given orally every 24 hours. Make sure it is NOT the formulation with a decongestant (such as Zyrtec-D) because cats cannot tolerate decongestants.
Combined with high doses of omega-3 fatty acids antihistamines work to relieve his itchiness, so continue the fish oil pearls. I recommend a dose based upon the EPA portion (eicosapentanoic acid) of the supplement as if we do that the rest of the supplement will be properly balanced. Give him 20mg of EPA per pound of body weight per day. For example an 8 pound cat could take 160mg of EPA per day.
Antihistamines and omega-3 fatty acids work synergistically, better together than either one alone. These should help reduce the itch. Be aware that antihistamines can cause drowsiness or hyperactivity which should resolve with continued use.
Food allergy is another reason for excessive grooming. You might wish to try a hypoallergenic food for 8 weeks or so. My suggestions are Hills Z/D or Royal Canin Duck and Green peas. He will need to eat only that food, no other treats or foods during the food trial.
Full or impacted/infected anal glands can also lead to excessively grooming near the lower back and tail base. If there are other cats around that he doesn't get along with perhaps this is stress related. If so a product called Feliway, which is a synthetic version of a calming feline pheromone, may help. You can purchase this from petstores or online.
You can add oral calming supplements like Rescue Remedy drops for pets, or Zylkene.
Other outside parasites like Cheyletiella or sarcoptic mange are possible causes as well, although both are highly contagious, so I would expect your other kitties, if you have them, to get itchy too eventually.
If he were an older fellow spinal arthritis could also cause these symptoms, but at 4 years he is a bit young for that.
For now I would start with continued flea control, an antihistamine and omega 3 fatty acids. If he's not significantly better in 2 weeks then it's time for a veterinary examination to look further for problems such as mites or full anal glands,and/or a hypoallergenic food trial.
Please let me know if you have further questions by replying to this post.