I think I'd have a vet out to look at him because that peeling is certainly not a young horse thing. I've been around thousands of horses in my life and I've never seen anything like that unless there was some sort of underlying cause that required treatment like allergies or fungus.
It also appears that he's got some hair loss going on as well in the middle of his chest. That solidifies the idea in my mind that there's something more serious going on.
I'd get the skin issue taken care of and worry about the bathing problems later...or, depending on the treatment, you might be able to deal with both at the same time.
The way I train bathing is the way I train everything else, approach and retreat. If you are spraying from a hose, start at his feet with a very light/fine spray/mist. I don't tie them up for this in case they freak out. I keep them on a lead or, if they are prone to pull away, I'll keep them on a lead in a small pen. Then, when I start spraying them, they can move in a circle around me. They will eventually stop moving and when they do, I stop spraying them and give a good scratch in their favorite spots. Then I start all over. I've never had a horse take more than just a few minutes of this on each side before they would stand still for a bath all over.
Also, something I've found out. If you wait and give them a bath after a good workout when they are hot and sweaty, they start to enjoy them more.