Is flaky skin sign of a rash resolving?

Not necessarily. Flaky skin can be the beginning sign of a rash or can appear after a rash has resolved.
Flaky skin can have… Many causes. Might simply be dry skin from poor fluid intake, dry environment, harsh/ drying soaps, too hot showers or long baths. Some skin conditions have flaky skin as part of their characteristics: seborrheic dermatitis has oily flakes; psoriasis can have flakes; "ringworm" can be flaky. Try moisturizing creams & body wash. If no improvement, see fp for advice/treatment.