Yes, the answer is: change applying to I apply.
This is because, in the sentence
"My skin feels a lot smoother after applying lotion,"
It makes it seem like the skin itself is applying lotion.
In order to make it grammatically correct, you have to specify that YOU are the one applying the lotion, NOT your skin. So if you change "applying" to "I apply," it makes the sentence clearer:
"My skin feels a lot smoother after I apply lotion."
