I don't know exactly how to describe what a rash would look like - I think there are many different possibilities. Have you seen this link?
Does my LO have food intolerances?Hypoallergenic formula is formula in which the milk proteins are broken down to be very small so that the body does not recognize them. Elemental formula (which I assume is the same as milk protein free milk) has no milk proteins in it, it is built up from amino acids directly. Most LO's who are MPI do well with hypoallergenic formula, only some (I think 10% of all MPI LO's) require elemental formula (which is way more expensive).
In our family no one has intolerances or allergies but my DS is MPI (on elemental formula) with lots of other food sensitivities. I think allergies run in families but I guess intolerances can just happen to anyone.
I think there is an adaptation period for the body every time you change milk, but other than that I don't think it's harmful. But TBH I don't think lactose free milk is going to help him at all, since lactose intolerance is so rare. And adding sugar to his formula, I agree with you, it's not the best
If you try hypoallergenic milk you have to give it a 2 week adaptation period before you can conclude whether or not it has improved his symptoms.
Don't worry about asking lots of questions, it is so stressful when you don't know and the dr is not very helpful