[guided]The useful structure is not merely that $E$ is graded; it is that the three operators $L$, $\Lambda$, and $H$ form a finite-dimensional $\mathfrak{sl}_2$ representation. The primitive vectors are the lowest vectors for this convention: a vector $p\in E^m$ is primitive exactly when
\begin{align*}
\Lambda p=0.
\end{align*}
Starting from such a primitive vector, repeated application of $L$ gives the string
\begin{align*}
p,\quad Lp,\quad L^2p,\quad \dots.
\end{align*}
Because $E^j=\{0\}$ for $j>2n$, this string must terminate. More precisely, the finite-dimensional representation theorem for $\mathfrak{sl}_2$ applies because $E$ is finite-dimensional and the previous step established
\begin{align*}
[\Lambda,L]=H,
\end{align*}
\begin{align*}
[H,L]=2L,
\end{align*}
and
\begin{align*}
[H,\Lambda]=-2\Lambda.
\end{align*}
In that representation, a primitive vector $p\in P^m$ is a lowest-weight vector of $H$-weight $m-n$. The irreducible $\mathfrak{sl}_2$ string generated by $p$ has highest degree $2n-m$, so its nonzero part is
\begin{align*}
p,\quad Lp,\quad L^2p,\quad \dots,\quad L^{n-m}p,
\end{align*}
and $L^{n-m+1}p=0$. Thus a primitive degree-$m$ vector contributes one summand in each degree
\begin{align*}
m,\quad m+2,\quad m+4,\quad \dots,\quad 2n-m.
\end{align*}
The same finite-dimensional $\mathfrak{sl}_2$ decomposition gives the direct sum of all such irreducible strings. Therefore every element of $E^k$ can be written uniquely as a finite sum of elements of the form $L^rp$ with
\begin{align*}
p\in P^{k-2r}.
\end{align*}
Equivalently,
\begin{align*}
E^k=\bigoplus_{r\ge 0}L^rP^{k-2r}.
\end{align*}
The directness is important: once we prove that $L^{n-k}$ is an isomorphism on each primitive-string summand, the direct sum decomposition lets us assemble those isomorphisms into an isomorphism on all of $E^k$.[/guided]