My shih tzu "Jenni" has always had sensitive skin and prone to having allergies (flea) and hot spots. We use advantix on her for fleas and tics. My question is: What and why are there little itchy black scab looking things on her skin by her rear legs and back?

The little black scab looking things are probably just that, scabs. Unless they're moving. If they move, than its probably a parasite.