It might be worth trying a probiotic to see if it helps with the rash. Like everyone else is saying, that poop frequency is normal.
Regarding the possibility of a food issue, there's a great book ('Is This Your Child?' by Doris Rapp) that has explanations of food reaction symptoms (picky eating can actually be a symptom) and also has information about how to track down which food is a problem. You can't necessarily identify a food issue based on *which* symptoms a person has. Your friend could take a look at it and see if there are any other symptoms that indicate an allergy or sensitivity. Allergy testing is good, too, but won't pick up sensitivities at all and is only about 50% accurate for allergies.
Have you all tried a different brand of diapers to see if that might be an issue?
The other thing I'd suggest about the rashes is keeping a food diary. Write down everything the boy eats/drinks and then note any symptoms. They're a pain in the butt but can give great information. Ours helped me identify my baby's sensitivity to rice!
Best of luck... hope you guys can get the poor little guy's rash cleared up!