My naval felt wet inside, when looking in it I noticed it was very red & irritated & it has a small amount of blood in it. What could this be?

Tough call! We don't have enough information. Have you changed any skin care products or detergents? Do you have diabetes? Do you have a piercing? You could have a fungal or bacterial infection or a reaction to a new soap, lotion or spray. Stop any new products. Clean it twice a day (gently!) with unscented mild soap and see your doc if no better in a day or two, sooner if worse! Avoid fragrances for n.