Imiquimod and Pembrolizumab in Treating Patients With Stage IIIB-IV Melanoma

Inclusion Criteria: * Histological confirmation of stage IIIB, IIIC, IVM1a, IVM1b, or IVM1c that is not suitable for surgical resection * Patients must not have received prior pembrolizumab or other anti-PD1/PDL1 therapies for their metastatic disease * At least one cutaneous lesion that is amenable to treatment with topical imiquimod * Measurable disease by RECIST * Eastern Cooperative Oncology Group (ECOG) performance status (PS) of 0 or 1 * Absolute neutrophil count (ANC) \>= 1500/mm\^3 * Platelet count \>= 100,000/mm\^3 * Hemoglobin \> 9.0 g/dL or \>= 5.6 mmol/L without transfusion or (EPO) erythropoietin dependency (within 7 days of assessment) * Serum total bilirubin =\< 1.5 X upper limit of normal (ULN) or direct bilirubin =\< (ULN) for subjects with total bilirubin levels \> 1.5 ULN * Aspartate transaminase (AST) =\< 2.5 x ULN or =\< 5 x ULN for subjects with liver metastases * Albumin \>= 2.5mg/dL * International normalized ratio (INR) or prothrombin time (PT) =\< 1.5 X ULN unless subject is receiving anticoagulant therapy as long as PT or partial thromboplastin time (PTT) is within therapeutic range of intended use of anticoagulants * Activated partial thromboplastin time (aPTT) =\< 1.5 ULN unless subject is receiving anticoagulant therapy as long as PT or PTT is within therapeutic range of intended use of anticoagulants * Creatinine =\< 1.5 X upper limit of normal (ULN) * NOTE: measured or calculated (per institutional standard) creatinine clearance is acceptab…