Are there any plugins that would do this? Let's say you highlight a code block, when you press undo, it undoes the last change with in that code block?
I've done a lot of digging into Sublime's internals, and I don't think this is possible. Commands (processes executed when you select a menu item or hit a key combination) are implemented in one of two ways: either in Python, making use of the API, or internally in C++ and compiled directly into the executable or a library. If a command is implemented in pure Python, such as delete_word (source in Packages/Default/delete_word.py), you can edit the source if necessary or take portions to use in your own code. However, if a command is implemented internally, there's not much you can do to modify it, unless it has options that are documented somewhere. You basically have to use it as-is.
Which brings us to the undo/redo commands, and the edit history. As far as I can tell (since Sublime is not open source - yet), this entire functionality is completely implemented internally, with only the command names exposed. I have been completely unable to find any way of viewing or accessing the actual changes made to the undo/redo stack. The command_history() method of the sublime.View class accesses the commands in the undo/redo stack, but not the actual changes they made.
So, all of this is to say that one could not likely make a plugin that could access the change history of an arbitrary selection in Sublime. One of the major issues (aside from the fact that the change history of the view is not accessible) is that the text you select now might not correspond to anything at a certain point in the history - it might not exist, or could have been altered so fundamentally that it would be essentially impossible to identify which changes should be associated with the selection, and which not. I have never heard of a similar feature in any other editor, most likely for that exact reason.