Hi..
Thanks for the query..
Well, it looks like the rashes around the mouth can be due to
Perioral dermatitis.
It is a kind of
allergic reaction causing rashes and inflammation around the lips and common allergens that can cause this are Fluoride containing toothpaste, use of topical steroids or steroid nose sprays, using chemical containing skin cosmetics, bacterial and
fungal infection etc..
Dry mouth can be related to the cause similar to your rashes but if it occurs exclusively at night then it can be probably "Mouth Breathing" habit..
For the rashes you can be advised topical application of antibiotic ointments like those containing
Metronidazole,
Erythromycin etc.
Oral Erythromycin can also be advised.
Avoid using steroid ointments or lotions.
Do cool compresses.
For dry mouth start chewing sugar free chewing gums and tart candies.
Dink plenty of water and gargle with methylcellulose containing Mouthwash.
Instil artificial saliva drops or gels in mouth..
At night stick xylitol patches inside mouth to prevent dryness..
Hope this helps..
Regards.