#2. $100 on the table: He's got a yeast infection. When a diaper rash is bumpy like that... you need to use an antifungal. You can get one from your ped for the first time so that you know how to ID them in the future, and then after that they'll send you to get an OTC lotrimine cream from your pharmacy for any recurrances, or they'll tell you to get one at the appointment.
UNFORTUNATELY what your mum is doing is making it much, much worse. Corn starch is pure sugar, and yeast feeds off of sugar, as all bakers and brewers and med types know.
Baby powder USED to help with preventing yeast infections when it was made of talcum powder, but talcum powder is very bad for the lungs, so they switched to corn starch... which just absorbs. You don't want to go around snorting it or anything... but it's not going to cause damage, because it's water soluable... unlike clay or rock dust. Mention the corn starch to your ped and you can get a doctor's note for your mum not to use it anymore.