I would like to add a title to the block, placing the title on top of the block.
\documentclass[border=5mm]{standalone}
\usepackage{tikz}
\usetikzlibrary{shapes,arrows}
\usetikzlibrary{backgrounds, fit, positioning}
\begin{document}
\tikzstyle{block} = [draw, rectangle,
text width=3cm,
minimum height=1.7cm,
minimum width=3cm,
fill=blue!20]
\begin{tikzpicture}[every text node part/.style={align=center}]
\node [block] (SparseRec) {Sparse \\ Reconstruction};
\node [block, below=1cm of SparseRec] (DenseRec) {Dense \\ Reconstruction};
\node [block, below=1cm of DenseRec] (MultiText) {Multi-texturing};
\begin{scope}[on background layer]
\node [draw, double=black, dashed, distance = 3pt, fit=(SparseRec) (MultiText), fill=red, rounded corners, inner sep=.5cm] {r};
\end{scope}
% Once the nodes are placed, connecting them is easy.
\draw [->, line width=0.7mm] (SparseRec) -- (DenseRec);
\draw [->, line width=0.7mm] (DenseRec) -- (MultiText);
\end{tikzpicture}
\end{document}