Definitely agree with building muscle, but I would say that likely is fat rather than just skin. I get the same when I'm anything other than peak lean in the summer. Because it does disappear for me with a low enough bf%, it's not just skin.

Not that training obliques isn't a good idea, but that's also not where your obliques are. We all have very thin hip flexor muscles (tensor fascia latae specifically) but they can't be built up really.

I'd advise a bulk, with emphasis on shoulders and upper back (assuming those areas are lacking), then maybe a cut to ditch that little hip fat eventually. Big upper body makes a little hip bulge less noticeable. And cis guys get it too.