I have had the same problem with my Apple Watch. The silicone band does not allow for much airflow. The reason it is happening is because your skin is not able to breathe and is causing sweat to not dry on your skin. Also making sure the back of the watch is clean before you wear it will help as well. Just use a damp towel, but no soaps or detergents.
Replacing the silicone band with a nylon, non silicone band will help. The Milanese loop and nylon band has worked well for me, but there are plenty to choose from third-party sellers. I have bought some bands from Amazon. They are not as good quality as the apple branded bands, and Apples also have a one-year warranty.
I also wear it a little loose, but make sure it is still making contact with your wrist.
Apple will return products bought in their stores for up to 14 days. But if you are having skin conditions due to the Watch they likely will make an exception. I would contact Apple support for advice on how to move forward. Download the new Apple Support app it is the easiest way to get help