How does the auditory system represent each frequency

The basics of the hairs being tuned for each frequency, I assume by length, and spread across the spectrum perceived are only the beginning. Is this discrete differentiation carried to the with a nerve/axion per hair, or is there some kind of reduction or compression that takes place.
We learned that in the eye each of the 3 colour receptors cross connect and ultimately there is a significant reduction before the optic nerve bundle carries the information to the brain. It is not clear how both colour and intensity is transferred, but things like edge detection is already occurring in the retina.

So are there similar things happening in the ear? Perhaps harmonics are detected do to resonance frequency overlaps. Maybe genitics are influencing being "tone deaf".