My daughter gets crazy bad rashes. I've had to give her tylenol to help her get through them probably 3 or 4 times because she's had those same screaming issues. For us they are always a result of loose bowel movements (like from teething) or eating/drinking something she shouldn't (she cant have any kind of fruit juice). For healing, if its bad I use antibiotic cream like neosporin (the kind w/ pain reliever) and then powder on the unopen areas (for my DD the zinc cream makes her scream so much). Lots of "air time" helps too.
For comfort - luke warm water baths with no bubble bath or soap in the water at all, and super soft cloth wipes (I generally dunk it in some cool water, squeeze it over the area and then just pat a few times and let it air dry for a moment before re-diapering)
I don't know the exact circumstances of your nephew's rash, but my DD had one in disposables and still had them in cloth so it wasnt anything to do with the cloth diapers for us. I hope he starts to feel better soon!