Sounds like a simple skin Staph infection, seen it several times. It is caused by a stratch on the baby then most probably the mom's milk gets in it and sets up the skin infection. Once it starts on one puppy it is easy to spread to the others. Take a puppy to your vet to be sure, they will prescribe a antibiotic soap (one brand is Etiderm made by Virbac) which you will start twice a day. The vet will give you directions, it is also on the bottle. It takes about two weeks for it to completely clear up but the spreading will stop after the 1st day.