From history it seems that you might be having dermatitis
or fungal infection
on your scrotum.
Go for one antibiotic medicine course.
Apply triple action cream on the part.
Keep local hygiene clean and healthy.
For skin problem consult dermatologist
Having small size penis is genetically built up, but having size of 2-3 inches while erection is enough to satisfy your partner.
For your this problem you may consult sexologist
Ok and take care.