In my experience, with our Wolf Hybrid, a "hot spot" usually starts with a flea bite that itches them. they start chewing on that spot, to stop the itching, then moisture from their mouths, comes into play. With hair covering the spot, you have heat being held at the site...the simple flea bite grows into an infection, the spot grows, and is constantly aggrevated by the dog's biting in this area.
The vet will usually shave this spot, to get the air down to the skin, and we used to get a powdered antibiotic to use on the spot.
Cosmo had three "hot spots" in his life, and it wasn't fun for him, or for us, trying to get him to stop chewing!