Since I have been TRYING to figure out exactly what this is I have been doing some more research and it appears these things are Cystic or Nodular acne. As I said before, I have had this for almost 10 years. It all started around the time of menopause. It seems that bacteria are present in the hair follicle and it gets infected. I notice that where it hurts the MOST isn't right at the hair follicle but to the side of it. AND that's is where I get the majority of the pain and bloody fluid from it. Here is a diagram of what it looks like Under the skin:

I also read something that seems particulaly pertinent right now. it said that it can get Worse if you are losing weight, which I have been over the past few months. I was thinking that. Maybe free floating fat in the blood might cause it or at least aggravete it and make it worse. The bloody fluid is actually blood and built up OIL. The Inflammation Spillage are tiny little bumps aroubnd it that hurt and also contain bloddy fluid and if I don't open them up and clean them out they get worse. I have tried leaving them alone but then they just get bigger. That's the spreading you see around the whole area.
I hope eventually this problem resolves itself because obviously medical science can't help me. Maybe if I get real skinny the whole thing will go away.