1. Unless you're getting paid to use it, and get it for free; or unless you're wearing cycling shorts with a real skin-of-dead-lizard chamois, you don't need to rub chamois cream on your shorts.
2. If, for whatever reason, your nether parts are swollen and rubbing against each other, Chamois Butter is the best thing I've found to reduce friction and to prevent further irration.
3. Bag Balm (see 10:20am's post, that's a good price!) is my weapon of choice for chafing, irration, infected hairs, nicks, scratches, etc. It seems to help heal the skin and reduce infection. Chamois Butter doesn't do that well. Bag Balm is less effective at reducing friction and chafing, though.
4. #2 shouldn't happen much. I brought home most of a $1 sample pack of Chamois Butter from a three month tour.
Your butt shouldn't be experiencing much rubbing. Decent shorts, chamois, and saddle should take care of that.