[proofplan]
We proceed by induction on $n = \dim V$.
If $\phi = 0$, any basis gives the zero diagonal matrix.
Otherwise, we find a vector $v$ with $\phi(v, v) \neq 0$ (using $\mathrm{Char}\,\mathbb{F} \neq 2$ to handle the case where all diagonal entries of $\phi$ on basis vectors vanish but $\phi$ is nonzero), decompose $V = \langle v \rangle \oplus v^\perp$, and apply the inductive hypothesis to $v^\perp$.
[/proofplan]
[step:Handle the base case and the zero form]
If $n = 0$ or $\phi = 0$, any basis gives the zero diagonal matrix.
[/step]
[step:Find a non-isotropic vector $v$ with $\phi(v, v) \neq 0$]
Assume $\phi \neq 0$.
Choose any basis $(e_1, \dots, e_n)$ for $V$.
If $\phi(e_i, e_i) \neq 0$ for some $i$, take $v = e_i$.
If $\phi(e_i, e_i) = 0$ for all $i$ but $\phi(e_i, e_j) \neq 0$ for some $i \neq j$, set $v = e_i + e_j$.
Then:
\begin{align*}
\phi(v, v) = \phi(e_i, e_i) + 2\phi(e_i, e_j) + \phi(e_j, e_j) = 2\phi(e_i, e_j) \neq 0.
\end{align*}
The factor $2\phi(e_i, e_j) \neq 0$ uses $\mathrm{Char}\,\mathbb{F} \neq 2$.
[guided]
Why must there exist some basis pair $(i, j)$ with $\phi(e_i, e_j) \neq 0$?
Because $\phi \neq 0$ means $\phi(x, y) \neq 0$ for some $x, y \in V$.
Expanding in any basis, $\phi(x, y) = \sum_{i,j} x_i y_j \phi(e_i, e_j)$, so at least one $\phi(e_i, e_j) \neq 0$.
If all diagonal entries $\phi(e_i, e_i)$ vanish, some off-diagonal entry $\phi(e_i, e_j) \neq 0$ with $i \neq j$.
We exploit this by computing:
\begin{align*}
\phi(e_i + e_j, e_i + e_j) = \phi(e_i, e_i) + \phi(e_i, e_j) + \phi(e_j, e_i) + \phi(e_j, e_j) = 0 + 2\phi(e_i, e_j) + 0.
\end{align*}
The factor of $2$ appears because $\phi$ is symmetric: $\phi(e_j, e_i) = \phi(e_i, e_j)$.
Since $\mathrm{Char}\,\mathbb{F} \neq 2$ and $\phi(e_i, e_j) \neq 0$, the product $2\phi(e_i, e_j) \neq 0$.
This is the only place in the proof where $\mathrm{Char}\,\mathbb{F} \neq 2$ is used.
Over a field of characteristic $2$, a symmetric bilinear form need not be diagonalisable (since the off-diagonal cross-terms cannot be detected by evaluating $\phi$ on a single vector).
[/guided]
[/step]
[step:Decompose $V = \langle v \rangle \oplus v^\perp$ using $\phi(v, v) \neq 0$]
Set $e_1 = v$ and define $W = v^\perp = \{w \in V : \phi(v, w) = 0\}$.
The map $w \mapsto \phi(v, w)$ is a nonzero linear functional on $V$ (nonzero because $\phi(v, v) \neq 0$).
By [Rank-Nullity](/theorems/384), $\dim W = n - 1$.
[claim:Direct Sum Decomposition]
$V = \langle v \rangle \oplus W$.
[/claim]
[proof]
If $u \in \langle v \rangle \cap W$, then $u = cv$ for some $c \in \mathbb{F}$, and $\phi(v, cv) = c\,\phi(v, v) = 0$.
Since $\phi(v, v) \neq 0$, we have $c = 0$, so $u = \mathbf{0}$.
Therefore $\langle v \rangle \cap W = \{\mathbf{0}\}$.
Since $\dim\langle v \rangle + \dim W = 1 + (n - 1) = n = \dim V$, the sum $\langle v \rangle + W$ has dimension $n$, giving $V = \langle v \rangle \oplus W$.
[/proof]
[/step]
[step:Apply the inductive hypothesis to $\phi|_{W \times W}$ and assemble the diagonal basis]
The restriction $\phi|_{W \times W}$ is a symmetric bilinear form on $W$ with $\dim W = n - 1$.
By the inductive hypothesis, there exists a basis $(e_2, \dots, e_n)$ for $W$ in which $\phi|_W$ is diagonal.
Then $(e_1, e_2, \dots, e_n)$ is a basis for $V$.
For $j \geq 2$: $\phi(e_1, e_j) = 0$ since $e_j \in W = v^\perp$.
For $2 \leq i \neq j \leq n$: $\phi(e_i, e_j) = 0$ by the inductive hypothesis.
So the matrix of $\phi$ with respect to $(e_1, \dots, e_n)$ is $\mathrm{diag}(\phi(e_1, e_1), \dots, \phi(e_n, e_n))$.
[/step]