One of mine (Sam) has a grain allergy, if he has cereals (wheat, rye, etc) in his food he becomes hyperactive, stressed and overgrooms.
This is one of the easiest things to eliminate as a starter in your quest to find out what is causing her overgrooming, as it's simply a matter of changing her food for a few weeks to see what happens.
Sam likes James Wellbeloved dry senior turkey with rice (rice isn't considered a cereal) which is a complete food. Online from all suppliers, inc Zooplus, Pets at Home etc
If grain intolerance is not her problem, you may wish to consider using a supplement in her food called Zylkene which is a milk based, non-prescription calmer available from this reputable supplier in smaller quantities. It is suggested you use this for a couple of weeks to relieve stress and hopefully start to break the lick/lick cycle.
http://www.animeddirect.co.uk/zylkene-capsules-priced-per-tablet-75mg.htmlAs this is a non-medicinal preparation it will be fine for your other cat to consume it also.
I also recommend putting a few drops of Rescue Remedy Pet in her drinking water (please don't use the human version, it contains alcohol which is toxic to cats).
http://rescueremedypet.com/If this doesn't work, I suggest talking to your vet for advice about medication. There are several types available, some anti-depressants have been known to produce good results for overgroomers.
Your vet may suggest using an e-collar or similar to restrict her activities until her spikey fur has grown out.
I like this one but it doesn't necessarily prevent access to the lower extremities.
http://www.comfycollars.co.uk/There's also a chemical spray you can apply directly to the fur which tastes revolting and is designed to stop puppies and cats from chewing at stitches, Grannicks Bitter Apple is harmless and might help to put her off self grooming. You need to re-apply daily and be sure she doesn't move on to another area to compensate her habit. Available from your vet or Amazon UK
Overgrooming is cyclic, the broken shafts of hair feel rough and spikey, which the cat may perceive as feeling "wrong" so encouraging her to continue to groom it.
Until the soft fur grows out she may continue to groom and perpetually break more and more fur shafts, hence the cycle she's in now.
Addressing the cause of her grooming should allow her to move on, but she's unlikely to break the habit without collaring her until the soft fur grows out as she will simply start again while the fur is still spikey, I'm afraid.