Using standard sed and assuming every line contains exactly one START and one END substring (in that order):
# Skip (pass through) lines that does not have START followed by END.
/.*START\(.*\)END.*/ !b
# Save the original line in the hold space.
h
# Remove the start and the end from the line.
# This leaves the bit of the line that we want to modify.
# (This reuses the previous regular expression.)
s//\1/
# Modify what's left.
s/_this_//
s/modi/MODI/
y/as/45/
# Append the original line from the hold space,
# with a newline as delimiter.
G
# Move the modified bit into the correct spot with a substitution,
# while deleting the old substring between START and END.
s/\(.*\)\n\(.*START\).*\(END.*\)/\2\1\3/
Testing:
$ cat file
aomodi3hriq32| ¶³r 0q93aoiSTART_this_is_to_be_modified_ENDaqsdofuha23uru| ²23i ii3uhfia
oawpo3<9"§ A hSTART_this_also_needs_modification_ENDqa 032/a237(°1Q"§ >A_this_
START changeme ENDnot_this_modias
$ sed -f script file
aomodi3hriq32| ¶³r 0q93aoiSTARTi5_to_be_MODIfied_ENDaqsdofuha23uru| ²23i ii3uhfia
oawpo3<9"§ A hSTART4l5o_need5_MODIfic4tion_ENDqa 032/a237(°1Q"§ >A_this_
START ch4ngeme ENDnot_this_modias
In-line, on the command line:
sed -e '/.*START\(.*\)END.*/!b' -e h -e 's//\1/' \
-e 's/_this_//' -e 's/modi/MODI/' -e 'y/as/45/' \
-e G -e 's/\(.*\)\n\(.*START\).*\(END.*\)/\2\1\3/' file