Yes, the perceived loudness of audio is determined by the average (RMS, or root mean squared) volume, not the peak volume. Mastering limiters like the Maximizer (found in Cubase, Nuendo, and WaveLab) do exactly that: They increase the average volume, thereby making the volume sound louder. However, by raising the average volume closer to the peak volume, you diminish the impact of those peaks. That effectively decreases the dynamic range.
Steinberg's Maximizer is a capable mastering limiter. There are other 3rd-party plug-ins that can increase the loudness. My personal favorite is the Universal Audio Precision Limiter that works with the UAD series of DSP cards. Waves makes a series of plug-ins called the Ultramaximizer that also do a good job.
There are other tools (like multiband compressors) and techniques that can be used to increase loudness. But all of them work on the same concept of compressing and/or limiting the audio. Of course, every listener has their own method for increasing the volume: the volume knob.