The author actually explains this in the excerpt you've provided:
(...) in order that we may use matrix multiplication rules.
If you multiply two $N\times N$ matrices $A$ and $B$ with components $a_{ij}$ and $b_{lk}$ together, you write:
$$
C = AB = \sum_{m=1}^N a_{im}b_{mk}
$$
So as you see, the $(i,k)$th element of the resulting matrix $C$ is the scalar product of the $i$th row of the first matrix with the $k$th column of the second matrix. To ensure this, the indices you sum over have to somehow be "next to each other" in the notation.
If you take your formula
$$
\Lambda^{\mu'}_{\;\;\mu}\Lambda^{\nu'}_{\;\;\nu}\,\eta_{\mu'\nu'} = \eta_{\mu\nu}
$$
and want to write it in matrix form, you see that after you change the multiplication order
$$
\Lambda^{\mu'}_{\;\;\mu}\Lambda^{\nu'}_{\;\;\nu}\,\eta_{\mu'\nu'} = \Lambda^{\mu'}_{\;\;\mu}\,\eta_{\mu'\nu'}\Lambda^{\nu'}_{\;\;\nu}
$$
the $\nu'$s are next to each other, but the $\mu'$s aren't. So you have to switch around the indices in the first $\Lambda$, which is done via the transpose.
Only after you did that you have the correct order of the indices and you can write the equation in matrix form.
Addendum:
Let me try to explain the process in more detail in a simpler toy model. Although you say you do not understand how to go from tensor notation to matrix notation, this has actually nothing to do with the objects being tensors, so let's just drop the distinction between co- and contravariant indices and see if that way we can clear things up.
In the very simple example of two $2\times2$ matrices $A$ and $B$
$$
A=\left(\begin{matrix}
a_{11} & a_{12} \\
a_{21} & a_{22}
\end{matrix}\right) \qquad B =\left(\begin{matrix}
b_{11} & b_{12} \\
b_{21} & b_{22}
\end{matrix}\right)
$$
when we start at calculating $A\cdot B$ it is clear what has to happen:
$$
C:= A\cdot B = \begin{pmatrix}a_{11} & a_{12}\end{pmatrix}\cdot\begin{pmatrix}b_{11}\\b_{21}\end{pmatrix}\cdot\left(\begin{matrix}
1 & 0 \\
0 & 0
\end{matrix}\right) + \begin{pmatrix}a_{21} & a_{22}\end{pmatrix}\cdot\begin{pmatrix}b_{11}\\b_{21}\end{pmatrix}\cdot\left(\begin{matrix}
0 & 0 \\
1 & 0
\end{matrix}\right) + \begin{pmatrix}a_{11} & a_{12}\end{pmatrix}\cdot\begin{pmatrix}b_{12}\\b_{22}\end{pmatrix}\cdot\left(\begin{matrix}
0 & 1 \\
0 & 0
\end{matrix}\right)+\begin{pmatrix}a_{21} & a_{22}\end{pmatrix}\cdot\begin{pmatrix}b_{12}\\b_{22}\end{pmatrix}\cdot\left(\begin{matrix}
0 & 0 \\
0 & 1
\end{matrix}\right) = \left(\begin{matrix}
a_{11}b_{11}+a_{12}b_{21} & a_{11}b_{12}+a_{12}b_{22} \\
a_{21}b_{11}+a_{22}b_{21} & a_{21}b_{12}+a_{22}b_{22}
\end{matrix}\right)
$$
This is what I described above by "scalar product of row with column", but it should be clear from your linear algebra course how to do it.
The point I am trying to stress is when you are given two matrices and are supposed to calculate their product, the procedure is straightforward and it is also immediately clear how to write down the multiplication in indices. You just check the $(1,2)$ element of the resulting matrix $C$ and can simply read off which elements of $A$ you are supposed to combine with $B$.
On the other hand, if you know nothing about matrix multiplication and are just given the two matrices as some sort of "container" with four elements each, you are free to combine those element any way you like.
This is where the formula for the Lorentz transformation comes in: Your desired transformation property just gives you a procedure, written down as a specific summation, without telling you what this procedure means in terms of matrices.
The analogue in our toy model would be to combine the elements of $A$ and $B$ in the following fashion, where $d_{ij}$ is what I call this new combination:
$$
d_{ij} := \sum_{m=1}^2 a_{im}b_{jm}
$$
Now, what is $d_{11}$? That's easy, just plug the numbers in: $d_{11} = a_{11}b_{11}+a_{12}b_{12}$.
Huh, that's weird. This specific combination of elements does not appear in any of the components of the matrix product, $C$. What about the rest?
$$
D := (d_{ij})_{i,j=1,2} = \left(\begin{matrix}
a_{11}b_{11}+a_{12}b_{12} & a_{11}b_{21}+a_{12}b_{22} \\
a_{21}b_{11}+a_{22}b_{12} & a_{21}b_{21}+a_{22}b_{22}
\end{matrix}\right)
$$
This $D$ is obviously a matrix representation of the above index formula, but here's the thing: As it stands, it has no simple connection with the constituent matrices. When someone asks you: "How did you get matrix $D$?", you have to answer "Well, I did this thing where I took the elements according to the formula and I arrived at this result", which is a perfectly valid response, but you cannot say what you did with the matrices $A$ and $B$ as a whole.
Now if you look close at your matrix $D$ you notice something peculiar: It almost looks like the result of matrix multiplication, just that the elements $b_{12}$ and $b_{21}$ are in the wrong places, they are even exactly in each others' place!
This is where I hope to finalize this addendum: While you can leave your matrix $D$ as is, one final step makes it possible for you to write down the formula for the $d_{ij}$ in such a way that you can completely rely on the matrices $A$ and $B$ without having to address their elements.
This final step is taking the transpose of $B$ and realizing that the matrix $D$ has actually the whole time been $B^T\cdot A$.
Analogous considerations explain how to get the $\Lambda^T$.
Executive summary of the addendum:
The formula for the Lorentz transformations, arising from physical considerations and being correct without any conversions of it, is without those conversions just a formulaic procedure prescribing how to combine elements of $\Lambda$ and $\eta$ to get the desired result.
Conversion of one of the factors into its transpose allows not only to drop the summation notation, but also to express the formula in terms of the objects $\Lambda$ and $\eta$ themselves, without having to address their elements.