Can infection in penis occur if done with dirty hands and halt the process of healing of nerves and skin ..

Dirt can infect: Good hygiene is always the best way to stay healthy. Dirt, if u think about it, contains germs by definition so best to limit exposure. Condoms would be helpful for example in your case. Indeed healing is also compromised by dirt/germs/ infection so even more reason to practice good hygiene. If u notice the first thing a good doctor does is wash their hands when u first meet them.