Hi Denise, I'm sorry Butters is going through this, and I'm afraid I don't have any experience with this type of sore. It sounds like you're cleaning it properly, and using antibiotic cream may clear it up. I would keep an eye on it and if after treating it yourself, it doesn't clear up, or seems to be getting worse or spreading, then I would have the vet check it out. If it is a Staph infection, they can be more stubborn to clear up, and may need a stronger treatment like oral antibiotics. I hope it clears up, and he feels better soon.
As for him being neutered, I would think the risk of surgery at his age would be greater than the risk of getting Prostrate Cancer, he is almost 10 years old, and doesn't have any signs of cancer, so I would think he is okay. If he was my bully, I don't think I would have him neutered at his age. This is just my thinking and I don't know if its right or wrong, others may have a different view than me. Have you asked another vet for a second opinion on this?