Prelude: 1+2D
In 1+2D we have a matrix $$\Lambda = \begin{bmatrix}a&b&c\\
d&e&f\\
g&h&i
\end{bmatrix}
$$ which is being used to generate a symmetric matrix $\eta' = \Lambda^T \eta \Lambda$. We can rotate the two spatial dimensions into each other to find a family of null vectors $v(\theta) = [1, \cos\theta,\sin\theta]^T$ such that $v^T \eta v = 0$ and you want to consider only the $\Lambda$ such that $v^T \eta' v =0$ too, for all $\theta$. This would mean that
$$(a + b\cos\theta + c\sin\theta)^2 = (d+e\cos\theta + f \sin\theta)^2 + (g + h\cos\theta + i\sin\theta)^2.$$
So we have 6 degrees of freedom (symmetric 3x3 matrix $\eta'$) but presumably we have 5 equations here: terms in $\theta$ proportional to $1,$ $\cos\theta,$ $\sin\theta,$ $\cos(2\theta),$ and $\sin(2\theta):$ $$\begin{align}
2a^2 + b^2 + c^2 &= 2d^2 + e^2 + f^2 + 2g^2 + h^2 + i^2\\
ab &= de + gh\\
ac &= df + gi\\
b^2 - c^2 &= e^2 - f^2 + h^2 - i^2\\
bc &= ef + hi
\end{align}$$The three "small" equations above set all of the off-diagonal elements to be 0 in the resulting matrix. The first "big" equation can be reduced to $a^2 + b^2 = d^2 + e^2 + g^2 + h^2$ in light of the second, thus we would have $$\begin{align}a^2 - d^2 - g^2 &= - b^2 + e^2 + h^2 &:= K\\
b^2 - e^2 - h^2 &= c^2 - f^2 - i^2 &= -K
\end{align}$$ proving the form $$\begin{bmatrix}K&0&0\\0&-K&0\\0&0&-K\end{bmatrix}$$ for some $K$ which likewise does not have to be positive.
Extending to 1+N dimensions
Now let's just do the same thing as before, but probe $\eta'$ in 1+N dimensions with some basic null vectors that comprise the unit vector in the time direction $\hat w$ and the unit vector in some arbitrary space dimension $\hat x$, e.g. $$(\hat w \pm \hat x)^T\eta'(\hat w \pm \hat x) = 0.$$Since $\eta'$ is symmetric one gets results like $$\hat w^T \eta' \hat w ~\pm~ 2 \hat w^T\eta'\hat x ~+~ \hat x^T\eta'\hat x ~=~ 0$$ and this then argues that these off-diagonal elements $\hat w^T\eta'\hat x = 0$ directly.
The above rotational argument from 1+2D gives the same for the $\hat x^T\eta'\hat y$ terms if we just do a rotation from any spatial coordinate into any other, call them $\hat x$ and $\hat y$: we have even that $$(\hat w + \hat x \cos\theta + \hat y \sin\theta)^T \eta' (\hat w + \hat x \cos\theta + \hat y \sin\theta) = 0$$ and the $\sin(2\theta)$ component of that equation comes exclusively from $2 \hat x^T \eta' \hat y \cos\theta \sin\theta$ and this can only be zero if $\hat x^T \eta' \hat y = 0.$
So we've proven that all off-diagonal elements must be zero and then we can just probe with those first null vectors again, so if we use $\hat w + \hat x$ then we determine that the $(w, w)$ diagonal element must be the negative of the $(x, x)$ diagonal element, but since we chose $\hat x$ arbitrarily this must apply to all of the other diagonal elements: it must have the form $\operatorname{diag}(K, -K, -K, \dots)$.