This answer is part of Pet's Spring Cleaning Campaign. This question is old, but this answer will still help people with the same problem.
There's a number of things this could be and I cannot say for sure which one is correct.
Skin tags are small benign tumors that form primarily in areas where the skin forms creases (or rubs together), such as the neck, armpit and groin. They may also occur on the face, usually on the eyelids. Though tags up to a 12.7 mm long have been seen,2 they are typically the size of a grain of rice. The surface of an acrochordon may be smooth or irregular in appearance and is often raised from the surface of the skin on a fleshy stalk called a peduncle.
Personal note: My dog has skin tags all over his body and I think they are very common, especially in older pets. You just don't notice them often because the fur hides them too well.
Papilloma or warts are benign epithelial tumors growing exophytically (outwardly projecting) in nipple-like and often finger-like fronds.
A cyst is is a closed sac, having a distinct envelope and division compared with the nearby tissue. Hence, it is a cluster of cells that has grouped together to form a sac (like the manner in which water molecules group together to form a bubble); however, the distinguishing aspect of a cyst is that the cells forming the "shell" of such a sac are distinctly abnormal (in both appearance and behaviour) when compared with all surrounding cells for that given location. A cyst may contain air, fluids, or semi-solid material.
It could also be an equivalent of a pimple, a clogged skin pore that's filled with sebum and dead skin cells.
Those are just the most general terms and the most common skin conditions that look like this. The number of possible skin conditions is mind-boggling.
Regardless of what exactly it is, you should simply keep an eye on it. If the cat acts as if it's not even there, you can probably ignore it, too. But please have a vet look at it if any of the following occurs:
- The cat pulls the tail away when you touch the area, indicating pain or at least irritation.
- The thing grows notably and quickly.
- The thing gets red (either all over or a pattern of tiny dots or lines). This could indicate a tumor and it might be better to remove it.
- The tiny blood vessel gets notably big, even if it's just in one spot, or the cat bleeds from this area. The walls of the blood vessel might be weakened and if injured, the bleeding might not stop in the usual amount of time.