My cockatiel is all puffed up and there is a bald spot on his neck . what's wrong with him?

If you have other pets they might have done that to it, if not then it did it to itself. Also if its a baby or young and u feed it that formula thing then that might me taking the feathers off....it happened to mine too. But the blood thing is a little weird. If its in a cage all the time that's bad, try spending more time with it, let the cage open but cut its wing feathers off so it wont fly and just let it more room to be in, if the cage is closed if might be trying to get its head out and that might hurt it. Pay more attention to it and watch what it does that might be it.

You might also wan to call a vet.

Fluffed birds are sick birds and birds hide sickness as protection from predators until they can't hide it anymore, get him to the vet.

take it to the vet they know every thing