forgot to add, since then we haven't really seen him scratch or itch it as much. We never actually saw him scratch but he has not had a big puff of hair since the first day.
I'd give a rash the dog is "living with" a few days to get better, especially if I thought I knew what caused it. Human most anything isn't best of dogs - there are exceptions.
An oatmeal shampoo made for dogs may be a good path forward,
I have used lots of thinks for rash on the feet/legs including diluted vinegar and Epsom salts - and Iodine... but from what you describe just some gental washing with a dog safe soap may do the job.
Can you please list the ingredients that you can read on the human shampoo bottle? This will help identify the problem. I think you have learned a valuable lesson ... never use anything intended for humans on your dog. The same is true for some foods, cooked at home or bought packaged. Dogs have an anatomical system similar to ours, but their biological systems are very different.
I can't tell by the photos.....Are you sure this isn't a "Hot Spot"? Karla