
I'd echo Jeangenie - and add that I'd check with the vet re the cream you are using. It could be affecting the puppies .... and quite possibly there is something more appropriate to be done about these teats. From e-how .... "Creams and Balms
Humans typically use moisturizing creams and balms to treat chapped or irritated skin, but this method is not recommended for a nursing dog's nipples. Most creams are not intended for use on animals, and most contain ingredients that are not meant to be consumed orally. After applying the cream to a nursing dog's nipples, it is possible or even likely that either the nursing dog or her puppies will lick off the cream. Depending on the specific type of cream used, it could make the dogs sick, or at least discourage the puppies from feeding."
Too bad she's like this because worse it yet to come once the sharp teeth come through, poor girl. I'd be clipping the ends off those sharp nails almost from day one with some litters. It's not the teats that suffer usually, but indeed the area at the base of the teat, where the puppies use their feet on and that would happen especially if they have to work on the teat to get the milk through.
For sure, as long as the puppies are gaining on a daily basis, she is making enough milk to keep them going. Don't milk her - it's a waste of resources. The act of suckling will bring the milk down. Keep feeding her well with a good quality food - rich in protein and all should be well. If the litter is quiet too, that indicates she's feeding them well enough at the moment.
How many puppies are there? You may have to consider supplementing them - half on and half off if there are more than say 8 puppies?
http://www.justanswer.com/dog-health/2j7v5-new-mother-sore-nipples.html From a Google search - but run this past your vet first - my opinion.