A bath once a week is too much even if you are using oatmeal. Generally once a month is the maximum, with shallow footbaths inbetween. Water drys out the skin and can strip the naturals oils on the skin which act as a protective barrier. If you live in a dry climate, then I'd recommend getting a humidifier for the room or an air purifier with a built in humidifier, you'll both benefit from it. Or if your water is hard, this can also potentially cause skin problems (a filter and softener will help with this).
Also what food do you feed her, I noticed a big difference in my boy's skin when I transitioned him to premium quality cat food.
Keep that blistered area dry, no more baths as if it keeps getting wet it can't heal over and there's a risk of infection. If you notice an infection starting then you'll need to take her to the vet to get treatment/medication. To avoid infection, keep her cage very clean.
In terms of what caused it, have you changed any products, like detergent you wash her fleece in (or changed bedding) or cleaning products you use for her stuff? Or if you've given her quite a few baths once a week for some time and she had severe dry skin in is area perhaps it caused the skin to have a reaction.