I'm going to give a 50 minutes lecture about matrix diagonalization for first year college students and I would like to give some applications of it. I've been thinking about saying the calculation of matrix exponential become simpler in a diagonal matrix, but this subject is a higher level for them and I have only 10-15 minutes to talk about it.
So what do you think I can say to motivate them to study matrix diagonalization?
When motivating the diagonalization of matrices, I like to emphasize the following points in order to build an intrinsic narrative of why we are doing such a thing:
A matrix $A$ is not a linear transformation---it is the representation of a linear transformation $T$ with respect to a given basis $\mathcal{B}$. Symbolically, $A = \mathcal{Mat}(T, \mathcal{B})$.
Given a different basis $\mathcal{B}'$, we get a different matrix representing this linear transformation, which is related by a change of basis matrix: $A = P^{-1} B P$ where $B = \mathcal{Mat}(T, \mathcal{B}')$ and $P = \mathcal{Mat}(Id, \mathcal{B}', \mathcal{B}) $. For a non-trivial vector space, there are many possible bases we could choose and many possible matrix representations of a linear transformation. For a freshman in engineering/physics/..., connect this with the idea of choosing different coordinate systems when studying a physical problem. There's no "correct" coordinate system to use, only ones that are more convenient.
A natural question arises: what is the best basis we can pick to study the linear transformation $T$, i.e., in which basis is the matrix representation of $T$ simplest? Ask the students which matrices are easiest to multiply/invert/apply to vectors/etc. Invariably, this will be diagonal matrices. In particular, it is easier to see how a vector will be transformed under the effect of a diagonal matrix.
Thus our goal is to find a basis $\mathcal{B}'$ such that the matrix representation of $T$ is diagonal: $D = \mathcal{Mat}(T, \mathcal{B}')$. Again, this corresponds to finding the "best" coordinate system with which to study a problem.
Combining points (4) and (2), we arrive at $$A = P^{-1} D P.$$
After introducing the eigenvector equation $A \vec{v} = \lambda \vec{v}$ and $\det(A- \lambda I) =0$ and working a few examples, be sure to note that not all matrices are diagonalizeable!
A youtube video by 3blue1brown gives a nice graphical representation of diagonalization (and his entire "Essence of Linear Algebra" series makes excellent recommended viewing for students).
If you prefer to work with specific motivating examples (as opposed to showing how diagonalization of matrices is a natural instrinsic question to ask), considering finding the steady-state solution(s) of a Markov process. In particular, Google's classical PageRank algorithm is a $700B application of finding such a steady-state solution.