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Have you tried putting a little baby powder or corn startch in the crease? That will absorb most of what he drips and shouldn't cause any reaction.
I agree, a little baby powder. You should also wash his neck (just warm water on a cloth) each time you check him at night, for feedings or changings, so the milk doesn't sit there long. You might also want to try keeping him upright for a while after his feedings, so if he spits up, it's before you have gone back to sleep. I know that can be hard when you're tired, but try.