Your baby’s penis is probably inflamed due to infection. Contact dermatitis caused by diapers is an additional factor that supports infection. To begin, you can stop using synthetic diapers and start using cotton diapers. You will have to use a cream that contains both an antibiotic and corticosteroid to help clear the infection. If the infection is caused by a fungus, however, you will have to use some cream with anti-mycotics. You can bring your baby to a dermatologist to identify the infective agent.