Sound processing encompasses everything that happens to audio between the microphone and the speaker. Categories: dynamics (compression, limiting, gating, expansion), spectral (EQ, filtering, excitation), time-based (reverb, delay, chorus, flanging), spatial (panning, stereo widening, spatial audio), and corrective (noise reduction, de-essing, room correction).
Modern sound processing is almost entirely digital (DSP or native plugins), though analog hardware (compressors, EQs, preamps) is still prized for its nonlinear characteristics (saturation, coloration) that are harder to model perfectly in software.