So, one of our cats, Mr.Tibbs, has recently been excessively licking his back (right above his tail). And since this licking has started, hes been losing hair in the area, the only abnormal thing I can see, aside from the baldness of course, is dry flakey skin, its not everywhere on the cat, just in the area hes been licking. I bought some spray thats supposed to heal the dry skin, and it has made some difference in the dryness, but the hair doesnt seem to be growing back. What could this be? And more importantly, what should I do?

I would have a veterinarian check out the area.  He/She may want to do a skin scraping to rule out ringworm, but it may be simpler than that.  Could be as simple as flea allergies -- when cats have a flea allergy, they can react strongly to even one flea bite.  And the base of the tail is a favorite target for fleas.

It could be some kind of allergy or even stress. I just went through all of this with one of my kitties (which we ruled out the basics like allergies, ringworm etc). Stress could always be a factor and your kitty could just be over licking that particular area. I would definitely check with your vet about these possibilities.