My ds got craddle cap at 7 weeks. By 9 weeks he also had incredibly dry skin in his forehead, eyebrows & face. At 13 weeks he now has very dry skin just about everywhere, much worse in his creases. It sounds just like your son. I don't have the solution but can tell you what we have gone through.
We tried oil for weeks on his head with no luck.
Also tried Diprobase on his face and it made it worse.
Tried E45 on his face with no improvement.
We tired Polytar shampoo which was just too strong and made the skin awfully red.
We also use Oilatum in the bath (don't know if it makes a difference).
We used a hydrocortisone cream for 7 days only on his neck creases & ears as the skin was just raw. It made it better but I wouldn't like to keep using it.
Then moved to Double Base which made the craddle cap a lot softer and most of it came off - however it has all come back.
His skin is still incredibly dry if we don't apply the cream 4 times a day. His cheeks seems to be angry one day and Ok the next.
I don't think we have found the right solution for him (all creams above where prescribed by the GP). I have agreed with the GP to keep going back until we find what suits him. The GP is certain this is eczema and that we'll find something.
It is great to hear your experiences - very useful input to discuss with the GP.