Hi and welcome! She looks like a cutie! Kneecap dislocation is called Luxating Patella mine has that and it comes in 4 different grades, 4 being the worse. It depends the grade they have and how they handle it some times surgery is necessary. I'm sorry I dont know any thing about hot spots. Its is best to use a harness on small dogs always when hooking them to the leash, I use a harness when I walk mine but all the time she wears a collar with id tags on it but I never pull or hook a leash to the collar. There are different types of coats mine has thick hair and my moms has thin hair she might just have thin hair or maybe need a bath in a nice shampoo and conditioner. Another thing to remember about single coated dogs is they normally get colder then other dogs so you may need to get a few sweaters and a jacket. Also wanted to say how awesome it is you are going to rescue a doggie