Consider the input:
=sec1=
some-line
some-other-line
foo
bar=baz
=sec2=
c=baz
If I wish to process only =sec1= I can for example comment
If you're not interested in lines outside of the range, but just want the non-inclusive variant of the Iowa/Montana example from the question (which is what brought me here), you can write the "except for the first and last matching lines" clause easily enough with a second sed:
sed -n '/PATTERN1/,/PATTERN2/p' < input | sed '1d;$d'
Personally, I find this slightly clearer (albeit slower on large files) than the equivalent
sed -n '1,/PATTERN1/d;/PATTERN2/q;p' < input