Filters do work in the time domain, in the form of an algorithm (or an analog circuit).
Linear, time-invariant filters (such as high/low-pass filters) have a frequency response which is a function of the frequency. An ideal low-pass filter with cutoff frequency 1000Hz will have a frequency response that is 1 below 1000Hz and 0 above 1000Hz.
For detecting changes in amplitude, one technique is to first use an optional high-pass filter with very low cutoff frequency in order to eliminate DC components. Then get the absolute value of the resulting signal. The resulting positive signal then goes through a low-pass filter in order to smooth out individual cycles and remove unwanted noise, and that then goes through a deriver (which is a special type of high-pass filter), in order to detect changes in amplitude. The result is compared to some threshold in order to get the significant changes in amplitude.
As you may guess, all of the above needs a complete course in signal processing for clarification. Happy googling!