Everyone will give you a different treatment because not everything works on each and every horse. Generally speaking, however:
1. Shave all that hair off, down to a crew cut style including the dangling fetlock hair.
2. Picking scabs is a gray area: DON'T pick them if they aren't ready to come off - if your horse flinches OR you can see it's going to bleed, the scab is not ready to come off.
DO pick the scab off if the skin is healed over and there's no (or at least very little) sign it wants to bleed.
3. Contrary to popular belief don't use MTG. It's a sulphur-based product and that sulphur burns the open sores. Plus I've read on more than one forum of horses having such a bad allergic reaction to MTG, the Owner had to call the vet. Treating Scratches and Rainrot:
Scratches and/or rainrot that just won't clear up are signs of immune defiency and possibly a nutrition problem. That doesn't mean the horse isn't getting the best of care it just means the horse is lacking something to fight off these skin allergy issues, in its immune system.
I have four horses - they all eat the same and get brushed daily. Two of them deal with chronic scratches and rainrot, the third is totally unaffected, the fourth used to be unaffected until he developed metabolic issues which compromised his what??? ----> his immune system. Now he has a few rare outbreaks but I keep everybody's fetlock joint hair clipped crewcut style and that has reduced my problems by 80%.
You can Google "equine scratches and the immune system" or "rainrot and the immune system" and get a ton of hits. All of them want to sell you the be-all-end-al magic healing potion but, they all agree chronic issues are caused by a poor immune system and sometimes nutrition.
I have learned to tell when Scratches and rainrot are ready to rear their ugly heads before they actually explode into an itching/burning mess that drives the horse crazy (think athlete's foot
I either wash their legs with an anti-bacterial/anti-fungal product or Dawn Dish soap. Dry them off, then spray some Banixx on them or rub Absorbine Hooflex Thrush Remedy on the affected areas.
I also keep a host of cream and ointments on hand to mix together in case the sores do erupt.
It's important to keep after this garbage twice a day because Scratches can spread up the legs and can develop into cellulitis.
Brushes should not used between horses and should be washed in soap and water after EVERY use as both these "things" can be spread to other horses.
Hope this helps