Hi,
THis seems to be inflammation of the skin caused by the water.Irritant dermatitis, the most common type of contact dermatitis, involves inflammation resulting from contact with any substance that has the potential to irritate the skin.
You can apply a mild Corticosteroid ointment on the area for a short period of time to reduce the inflammation.Also oral anti-histamines like Cetrizine/Loratidine can be taken to treat the itchy skin.
ref:http://www.myonlinewellness.com/topic/adam1000869
Sounds like she may have scrapped against Fire Coral, Should not have lasted this long though. If it is getting worse then seek Dr attention. Talk to your local pharmacist for advice.
You can try any of the home remedies for insect bites and jellyfish stings, one that comes to mind is meat tenderizer (but must be a variety containing MSG-mono sodium glutamate)