How long can one use nystatin cream and does it have any side effort if used too long

My 15 month old boy was prescribed Nystatin cream 1000 for balanitis and diaper rash. I have been using it now for 1 week and 1 day and he is now itching himself when ever the diaper is taken off. He is also very red in the creases and around the anus. He does go to daycare and is it possible they are not applying it correctly? I do not want to continue use if it will cause the itching but I thought it would take care of that problem. Please advise.

Thank you very much