When my puppy was little, she had a bacterial infection on her belly, which was these little red, raised bumps. I think because she was so low to the ground, she got irritated by something she was touching. Anyhow, the vet gave her some antibiotics and it went away (haven't had the problem since).
As for allergies, I am dealing with those with my second one. It is very frustrating to find the cause! Yes, foods like Science Diet & Royal Canin the vets recommend aren't really that good (neither is Blue Buffalo really). I use the site dogfoodadvisor.com to check how good a food is. Small dogs sometimes cannot process chicken very well, so maybe you want to try a beef or lamb formula.
My dog's allergies symptoms are mainly that he scratches a lot. He also has very full anal glands that need to be emptied regularly (not by me! lol). I am still trying to find a way to give him relief.