Hot spot help!! My bichon mutt is eating herself raw!?

I have a seven-year-old Bichon (mixed with unknown breed) who has had hot spots for several years. A couple weeks ago she got a really bad one on her neck; she was scratching it with her paw CONSTANTLY and it was raw and nasty. Treated it with hydrogen peroxide; it scabbed over and is healing now. But now she has a hot spot on the base of her tail. It started small, but yesterday I was gone from home & when I got back she had chewed more and now there is a 2-3 inch section spreading up her back that is raw pink. I treated it with Neosporin on a Q-tip and she was shaking and crying and crying.

So, is it okay to use Neosporin on her? Is she maybe allergic to something in it? Also are there any natural/home remedies I could use on her? And why is she getting all these hotspots all of a sudden? (She has had four or five in the past month.)