My right eye is red, itchy, flaky sometimes slightly swollen in the morning, but then the swelling goes down as the day progresses. What is wrong?

Blepharitis. You should see your eye doctor right away to see if your symptoms are caused by an infection, dermatitis, an inflammation of the skin around the eye, or blepharitis, a condition where you can build up crusting and/or mucous around the eyes due to dysfunctional glands in the eyelids. The condition you have will determine the proper treatment.
Itchy eyes. Itchy eyes may be due to blepharitis, or inflammation of the eyelash area due to bacteria, or due to allergy. For blepharitis, try using lid scrubs, warm compresses, and Bacitracin ophthalmic ointment. For allergy, try zaditor (ketotifen) twice a day in each eye (this is over the counter). If the itching does not improve in a week, call your local ophthalmologist.