What a strange suggestion from the vet! I would have done the same thing; just stop using both products. Oh my.
In my experience, hives are mostly just itchy and irritating. But, of course, if you scratch at them, they turn sore and scabby. Otherwise, they just disappear with time and Benadryl! Your poor dog, she probably didn't know not to scratch!
"Happiness is a warm puppy."