I have never seen such a horrible sight on a chicken butt. If I discovered that on my rooster, this would be my thought process:
1. Red skin means infection or extreme irritation.
2. The barely emerging pin feathers offer a clue that something may be feeding on the butt feathers and may have burrowed into the skin around the feather shafts.
3. What type of life form would do that? Flies? Mites? Lice? All of these insects are attracted to the moisture around a chicken's vent area. Flies would lay eggs in any poop accumulated under the vent, then the maggots hatch in just a day and burrow under the skin to feed on tissue. The welts look like they could contain maggots. Look very carefully - do you detect any subtle movement under the skin?
4. I would cleanse the red welts with alcohol and make a tiny, shallow incision in one of the welts and squeeze the skin on either side of the incision to see if a maggot pops out. If that happens, you then know you're dealing with fly strike, although I've never seen a case that looks like that.
5. The appearance of the raised welts makes me suspicious that a life form is living under those welts.
6. If you have the means, I recommend having a vet look at it.
7. If you can't see a vet, I would spray the area with Vetericyn and lather on a thick layer of castor oil to smother insects if this is what is under the welts. If it's simply a rash, the castor oil will soothe it.
If this is fly strike, you will need to remove every single maggot. There is no other alternative treatment for fly strike.
Once the skin welts clear up, feathers should grow back. Feather Fixer is a pricey feed that promotes feather growth, or feed the roo some quality animal protein.