When is hand washing *not* appropriate?

Health professionals are eager to tell people how important proper hand-washing is, but I do not get a sense of when it is unreasonable to wash one's hands.

For example, how about if I handle a box of cereal which I bought earlier today? It is entirely possible that this morning, a clerk with the flu blew his nose then stocked that box of cereal.

So should I wash my hands before handling that box? And if so, for how many days should I consider it unclean? When can I expect that third-party germs would no longer be alive there?

And additionally, too much hand-washing can cause real skin damage. This not only hurts the local skin, but *increases* one's susceptibility to infection (though small open cracks in the skin). Right? So when it is better to *not* wash one's hands, even though they may have some germs on them? Is it acceptable to just wash one's fingertips some of the time?

And do soaps with lotions in them work against germs? How can they be washing germs off while applying oils to the skin at the same time?