Thank you for the response!
Where I work - the procedure is to “blow out” the steam wand before steaming, and afterwards so that no milk sits in the wand, because when you turn the wand off in milk some gets sucked back up. At night, we have brushed to clean it out - and we take the tip of the wands off, get a pitcher of hot water and turn them on, and off in the water - which sucks hot water up into the steam wand and forces it to come clean, then we let the steam wand, soak in a pitcher of hot water over night, and we leave the tip off and just set it in the pitcher.
But I agree with the rag thing - you just have to switch them out. And, I don’t know what everyone else uses but we use bleach - and after about two hours the bleach kind of just vanishes and if you pH test your rags, they won’t be up to health code standards.