Yes. Yes steroid creams and ointments may be used on the inside of labia.
Possibly. Best to be seen by your gyn physician for accurate diagnosis prior to treatment.
Probably. Since the otc cream is not formulated for the mucous membrane in the vagina, it may cause mild irritation for some people. However you can test a small area first to find out if it is irritating for you. Otherwise I see little harm if you use it for no more than a week.