Papular Urticaria: Given the description of multiple papules on the limbs, torso, legs, and some on the scalp without involvement of the wrist, hand, or foot, and the absence of systemic symptoms like fever, nausea, vomiting, shortness of breath, or chest pain, papular urticaria is a strong consideration. This condition is often seen in response to insect bites or other environmental allergens and can present with itchy papules.

Atopic Dermatitis (Eczema): Although the patient's age and the distribution of the rash might not be typical for atopic dermatitis, it cannot be ruled out without further history and examination. The presence of diabetes and hypertension might also influence the skin's condition and response to irritants or allergens.
Contact Dermatitis: This is a possibility if the patient has been exposed to new soaps, detergents, or other substances that could cause an allergic or irritant reaction. The distribution on the limbs, torso, and scalp could be consistent with exposure to such substances.
Prurigo Nodularis: Characterized by intensely itchy nodules, this condition could be considered, especially if the papules are nodular and extremely pruritic. However, the size (5-10 mm) and description might not fully align with typical presentations of prurigo nodularis.

Bullous Pemphigoid: Although less common, bullous pemphigoid can present with itchy papules and blisters, primarily in older adults. It's crucial to consider this diagnosis due to its potential for significant morbidity if not treated promptly.
Cutaneous T-Cell Lymphoma (Mycosis Fungoides): This rare condition can present with a variety of skin manifestations, including patches, plaques, and nodules, often with intense itching. Given the patient's age and the presence of a new, unexplained rash, it's essential to keep this in the differential, despite its lower likelihood.
Drug Eruption: Given the patient's history of diabetes and hypertension, he is likely on multiple medications. A drug eruption could present with a wide range of skin manifestations, including itchy papules, and is a critical diagnosis not to miss due to the potential for severe reactions.

Erythema Multiforme: This condition is characterized by target lesions and can be associated with infections or medications. While it's less likely given the description, it's a rare diagnosis that could be considered, especially if the patient has been exposed to new medications or has a history of recurrent infections.
Pityriasis Rosea: Typically presents with a herald patch followed by a secondary eruption of oval-shaped, scaling patches. The description provided does not fully align with pityriasis rosea, but it remains a rare consideration, especially if the patient is younger or the rash has evolved over time.