What does it mean when a dog digs a hole and lay down/rests in it? note: he's about 14 yrs old (human yrs)?

He's kind of old but I'm doubting that's the reason. We found out he has fleas and are taking care of it. We thought it was allergies and changed his food from pedigree to natural balance (allergy grain free) and yet he still has these rashes on his stomach and developed what look like nipples of a... show more He's kind of old but I'm doubting that's the reason. We found out he has fleas and are taking care of it. We thought it was allergies and changed his food from pedigree to natural balance (allergy grain free) and yet he still has these rashes on his stomach and developed what look like nipples of a female dog on his stomach area as well. What could be wrong??!! Also, he's been continuously biting at one area of his butt, right above his tail. Is this the site of a tick or something?
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