Itchy scalp. Seborrhoic dermatitis or cradle cap. This is usually caused by a fungus and can be treated with Nizoral (ketoconazole) shampoo. Head lice may also cause a similar problem. Psoriasis too, can I've you this symptom complex. Check for lice. In the end you may want to see adoctor.
Skin disease. Several skin diseases, especially seborrheic dermatitis and psoriasis can cause rashes like this. Thse conditions can be treated with shampoos and topical medications, such as steroids. One needs to check for lice too.