This will certainly not work for everyone (I was, quite frankly, surprised it worked for us) but my son loves those tight-fitting stretchy shirts like Under Armour or Champion Champion clothes for boys. The snugness of the fit prevents him from pulling the collar up over his face or his hands inside the sleeves (I am assuming this is what you mean by pulling himself further into his clothes). Some people find the feel of the nylon fabric intolerable but my son loves it. Definitely take him to the store and let him feel the fabric before you buy if you are thinking about trying this.
Some people have talked about general improvement of skin issues with alteration in diet (gluten, cassein, artificial dyes and other perservatives and additives seem to be common irritants) however there is mainly just anecdotal evidence to support the efficacy of such measures. On the lip licking, will he use or allow you to apply any kind of lip balm? Something with a waxy content like the original Chapstick would at least protect his lips from chapping though it probably won't do anything to stop the licking. Have you tried chewing gum? He might be less inclined to lick his lips if he had something to chew.
For us, if clothes are disliked for any reason, I just put them in the to give away bag and move on. Same with socks, if you haven't already gone through different brands and styles to find something that is comfortable for him, you may need to do that. Good luck!