If so, they are probably mealy bugs. Remove a ball of the cottony stuff and squeeze some between your fingers. If there's a hard bug in there, you probably have mealy bugs. Clean up the whole plant manually and keep an eye out in case they return.
The plant is a cactus not a Euphorbia. Those look like proper areoles to me. If that white stuff at the base was Euphorbia sap, it would be congealed and hard, or liquid and milky. You can break the skin somewhere (carefully, with a sharp blade) and it will ooze sap if it's Euphorbia... that's an easy test if you have doubts. Don't touch the sap with your bare skin.
The plant looks like it is about to branch everywhere in a big way. It is surprising that it remained solitary (no branches) for so long before it got started, but you can expect it to sprawl everywhere once the branches become proper stems. Those areas are going to attract mealy bug activity (the bugs tend to home in on fresh new growth where the nutrients must be more available).
The dehydration you're seeing (shriveling and wrinkling) could be within the range of survivability. Is the stem hard or has it gone soft anywhere? My guess would be something is not working below ground. The roots may not be taking up water, or maybe you're not watering enough, or maybe you watered too much and now the roots have rotted away. These are all possibilities.
Have there been any recent changes in how you have cared for the plant? It looks okay to me.