I think I second the amber necklace thing- Emme was never a drooly kid and I never even thought it could be the necklace, but she did wear one from 5 months until about 3 1/2 years old

She literally never soaked a single bib or her clothes, unless it was from drinking something and spitting it back out.
It does soun like you may need to look further into allergy issues with her, but in the meantime if you have to do something about the diaper rash, I agree with the PP who said to stop using wipes. I am interested to know what wipes you are using-- ingredients in them matter (I found that out with Emme).
Other than that, I'm sort of in the cereal camp... I think. They say not to start solids early unless medically necessary, and this to me falls under that category. Antibiotics come with their own set of potential issues that can be hard to reverse- thrush, allergic reactions, even worse diarrhea and rashes- but if the cereal causes any issues you can just stop the cereal and the problem will probably go away.
Does she take a bottle or how would you give her cereal if you go that route? I was picturing mixing it with some with breastmilk and giving it to her in a syringe....