I use cotton balls for bathing too. Ellie does NOT like it.
I am not sure if peroxide is safe to use in ears. I would get some ear cleaner. My vet gave us Chlorhexidern (sp?). It is a general use cleaner, I believe. We got that along with a med when Ellie had a yeast infection in her ears and we still use the cleaner. It doesn't smell too bad either.
Since she isn't licking her feet obsessively (I would think allergies) and her ears aren't crusty (sarcoptic mange) I have no idea what it is. I would still wonder about allergies though. You haven't changed food lately, right?