By definition [itex]F(u)[/itex] is the smallest field containing [itex]F[/itex] as well as [itex]u[/itex]. Since [itex]F(u)[/itex] is a field it is closed under multiplication and addition. So, if it contains [itex]u[/itex] then it contains [itex]u^n[/itex] for any [itex]n[/itex], hence it contains [itex]au^n[/itex] for any [itex]a\in F[/itex] and so must also contain all sums of these terms ie. every polynomial of the form [itex]f(u)[/itex]. Further, a field must contain inverses of all elements, so if it contains an expression [itex]f(u)[/itex] then it must contain the inverse [itex]f(u)^{-1}[/itex] as well. Finally, since we've shown it contains [itex]f(u)[/itex] and [itex]g(u)^{-1}[/itex], for any polynomials [itex]f,g[/itex] it must contain [itex]f(u)g(u)^{-1}[/itex] since it is closed under multiplication. This shows that [itex]F(u)[/itex] must contain the collection
[tex]K=\left\{\frac{f(u)}{g(u)}~\bigg|~ f,g\in F[x], g\neq 0 \right\}[/tex]
The fact that the [itex]u[/itex] is transcendental is used here in that [itex]g\neq 0[/itex] implies that [itex]g(u)\neq 0[/itex] so that it makes sense to divide by [itex]g(u)[/itex] in the larger field containing [itex]u[/itex].
To finish it off, you just need to check that this collection of quotients of polynomials is actually a field, and then it will necessarily be the smallest field containing both [itex]F[/itex] and [itex]u[/itex].
Intuitively, the field of quotients of [itex]F[x][/itex] is the smallest field containing [itex]F[x][/itex] in which every nonzero element has an inverse. So it should be the set of all quotients of [itex]f(x)/g(x)[/itex] where [itex]g\neq 0[/itex]. But since [itex]u[/itex] is transcendental, it satisfies no polynomial relations and so we can relabel [itex]x[/itex] by [itex]u[/itex] and we should still get the same thing.
To make this somewhat rigorous, to construct the field of quotients of [itex]F[x][/itex], you take the collection of all pairs [itex](f(x),g(x) )[/itex] where [itex]g(x)\neq 0[/itex] and quotient by the equivalence relation [itex](f(x),g(x))\sim (f'(x),g'(x))[/itex] when [itex]f(x)g'(x)-f'(x)g(x)=0[/itex]. Of course the pair [itex](f(x),g(x) )[/itex] is intuitively supposed to represent the quotient f(x)/g(x) so there is an obvious map [itex]\phi:\mathrm{Quot}(F[x])\to K[/itex] defined by
[tex]\phi(f(x),g(x) )=\frac{f(u)}{g(u)}[/tex]
To prove that these two things are isomorphic, check that this is well defined and an isomorphism. The fact that this is well-defined follows from the fact that the equivalence relation here is the same as cross multiplying fractions and the fact that [itex]u[/itex] is transcendental so that [itex]g(u)\neq 0[/itex] for [itex]g\neq 0[/itex]. Similarly, the fact that it is a ring homomorphism is because the addition and subtraction in the quotient field are essentially defined to copy the addition/multiplication of fractions. Finally, surjectivity is obvious and injectivity follows using the fact that [itex]u[/itex] is transcendental.