Yeast is naturally occurring on everybody's skin. It thrives in warm moist areas. Like the diaper area. When there is an imbalance in the warmth/moisture/cleansing, there can be an increase in the yeast colonies. Yup, gross, but common enough. I recently had a parent refuse to do anything about it, ie, doctor and prescription antifungal. So more frequent cleaning/changing, regular use of zinc oxide cream (zincofax or the like) and the parent should make sure she is thoroughly dry after baths.
I have never heard of the immunity to antifungal creams... it is different from antibiotics, and as far as I know, requires a prescription.
As far as the mom telling you before, don't stress about that, it is common enough that for me, it's not something you'd think of unless you had specifically asked.
As for the strong pee smell, that actually sounds more like a bladder infection. Yeast infection leaves red rash with spots.