Optimization-based methods are increasingly being implemented for structural damage detection (SDD) problems through the minimization of the objective functions based on vibration data. Meanwhile, the challenge of high computational cost hinders the applied use of SDD methods, especially upon addressing large-scale structures. In this study, a two-stage damage detection approach is proposed for damage localization as well as extent quantification which reduces the computational time of SDD problems. In the first stage of the proposed framework, suspected locations of damage are identified by employing a residual force vector. Then in the second stage, damage extent of already identified elements will be assessed by model updating method through three different optimization algorithms, namely particle swarm optimization (PSO), differential evolution (DE), and enhanced colliding bodies optimization (ECBO). To spare time-consuming modal analysis in each iteration of optimization algorithms, a PSO-based group method of data handling (GMDH) polynomial neural network (PNN) surrogate model is proposed. Performance of GMDH PNN strongly depends on the input variables, the number of input variables, and the order of the polynomial. The PSO-based GMDH PNN, developed in this study, employs PSO for the optimum selection of these parameters. Furthermore, the efficiency of Elemental Energy Quotient Indicator (EEQI) as a new damage index proposed in this paper is compared with the approach based on the natural frequency-based index. This paper also deals with the incomplete modal data measured from limited number of sensors. This problem is addressed by employing the model reduction technique and solving the SDD problem with modal information obtained from the reduced model. Numerical examples show that the suggested PSO-based GMDH surrogate model is an accurate tool for various types of SDD problems, and it can provide promising results with a significant reduction in computational time.