Yes, if you're watching the traffic, you can still tell which address a person is connecting to whether or not you can see the contents of that traffic. That's the nature of IP packets. There's no way around it. Then it's just a matter of doing a reverse-lookup on the destination IP to see it's owned by Facebook or Twitter.
You can shift the problem elsewhere by using a VPN to connect to some "safe" location, perhaps at work, perhaps at a datacenter. If all your IP traffic is tunneled over that VPN, then someone watching the tunnel can't tell what sites you're visiting.
However, someone watching the traffic at the far end of the tunnel, perhaps at your datacenter or at your office, is again able to see the traffic and make usage judgements just as your ISP can now.
Tor works on the same principle as a VPN, except that with Tor, the VPN is to some unknown endpoint somewhere out on the Internet, following a series of unpredictable hops that's difficult to trace.