What could cause a red rash in the perianal area under the scrotum that stings and chafes and flares on contact with water, bowel movement or touch?

Dermatitis: Probably......fungal in nature.Iron your under garments, Use loose boxers, Oral and local antifungal course will help......

Several causes!: If you are using a new soap, scents, cream, detergent, toilet paper, fabric softener, stop them. These can cause contact dermatitis which affects delicate skin quicker (also underwear ensures close contact). Or could be a fungus (yeast, jock itch). If no new skin/clothes products, try over the counter meds for jock itch. Also don't overscrub or use hot water (makes skin problems worse. See MD.