Thank you for the information. Your bump appears to be something known as Molluscum Contagiosum.
Molluscum Contagiosum is an infectious skin condition caused by a virus (Pox Virus) and spreads by skin to skin contact. The mode of transmission is usually sexual when these bumps occur on the genital area but they can occur there even otherwise.
The simplest way to deal with the bump would be to leave it alone if a patient is sexually inactive since these bumps disappear on their own in 6-12 months. However since during this time the bump can spread to a partner or to surrounding unaffected skin it is best to have your lesion removed by either radiofrequency, laser ablation, cryotherapy or needle extirpation followed by TCA application. Imiquimod cream also works well and is non invasive unlike the procedures I just listed. Your doctor can prescribe it for you.
If you cannot see a doctor then there are some over the counter treatments that like Zymaderm, Molluscum Rx, and Poxiderm that work. These are liquid formulations that need to be applied twice a day on the bump and allowed to dry and then left on. Benefit can take 6-12 weeks but the success rate is quite good.
NOTE: The virus can spread by auto-inoculation. That is by scratching existing lesions with the fingers. So if you're not having the bump removed, do not touch the it unnecessarily.
As for the dryness - this looks like normal penile dryness. Just use a moisturizing cream like Cetaphil once after your morning bath on the area and you should be fine.
Please feel free to ask if you have any queries. I will be happy to continue further and do everything I can to provide you with the service you seek.