It is not always bad to be blunt

You said you are worried about being too obvious. But sometimes there is nothing wrong wtih being obvious. This could well be one of those times.

In purely human warfare in the real world, there is a tendency to dehumanize the enemy. This can be done quite deliberately by some of the leadership of one or both sides even (this is a big part of propaganda in many wars). But it doesn't always happen, especially for shorter conflicts.

Sometimes two groups have a conflict that has nothing to do with the other side being evil (wrong on that subject perhaps, but not necessarily evil) that they fail to work out through discussion so it eventualy boils into fighting.

You could set your scenario up like that. You could be extremely blunt and still present moral dilemmas, possibly even more intense. The humans could hire the adventurers to deal with the lizard folk without ever claiming they are evil, merely that dispute X (land dispute is a popular one) exists and the lizard folk are wrong about that. Now the adventurers have multiple choices. They could say, "They may not be 'evil' but they are on the wrong side of the dispute and opposed to our employers, so we will kill them until the rest decide to flee."

Or they could seek a diplomatic solution. But you could make that interesting. If they were hired to kill or drive away the lizard folk, then the humans would have no obligation to pay anything for a diplomatic solution, especially if the final answer is not 100% favorable for the humans. And with no battle, there is no loot. So the adventurers need to face the possibility of doing the morally best thing without any material reward.

You could even make it seem that the lizard folks are actually on the right side of the conflict, but the humans won't acknowledge it. So, do the adventurers then side with the lizards? Even if the lizards can't pay?

If you don't have a conflict already planned out, land disputes are really easy to generate even if everyone behaves completely reasonably. If the lizard folk are nomadic and have been out of the area for a while, the town may have been built on or expanded onto some of their traditional land when they were away. The townsfolk may legitimately not know they began encroaching on the lizards folk lands.

The lizard folk might then have valid reasons to not sell the land. Perhaps the land is sacred, or they have taboos against building any permenant strutures at all that the town now violates. Or they might just be trying to charge a price much too high from the townsfolks perspective. The townsfolk would refuse to move because they have invested a lot in their current locations, and besides they felt justified. Their laws may not recognize that kind of nomadic land ownership the way the lizardfolk do.

No one is evil, and at least from their own perspective, no one is wrong.

Have the lizardfolk help them

So, if that is too blunt for you, then I'm going to agree with Flamma and Joe on their techniques to show them to be good.

But you could go further. You could have the heroes get attacked by some obvious evil, and a group of lizardfolk adventurers leap in on the battle On the side of the adventurers.

You don't even need the adventurers to be in real trouble, they could well be winning, but they still see the lizards actively helping them, fighting something obviously evil, perhaps even making calls of friendship (or at least temporary alliance) to the adventurers during the fight. They then have the choice of attacking the lizardfolk anyway or of talking to them on friendly terms.

It is not always bad to be blunt

You said you are worried about being too obvious. But sometimes there is nothing wrong wtih being obvious. This could well be one of those times.

In purely human warfare in the real world, there is a tendency to dehumanize the enemy. This can be done quite deliberately by some of the leadership of one or both sides even (this is a big part of propaganda in many wars). But it doesn't always happen, especially for shorter conflicts.

Sometimes two groups have a conflict that has nothing to do with the other side being evil (wrong on that subject perhaps, but not necessarily evil) that they fail to work out through discussion so it eventualy boils into fighting.

You could set your scenario up like that. You could be extremely blunt and still present moral dilemmas, possibly even more intense. The humans could hire the adventurers to deal with the lizard folk without ever claiming they are evil, merely that dispute X (land dispute is a popular one) exists and the lizard folk are wrong about that. Now the adventurers have multiple choices. They could say, "They may not be 'evil' but they are on the wrong side of the dispute and opposed to our employers, so we will kill them until the rest decide to flee."

Or they could seek a diplomatic solution. But you could make that interesting. If they were hired to kill or drive away the lizard folk, then the humans would have no obligation to pay anything for a diplomatic solution, especially if the final answer is not 100% favorable for the humans. And with no battle, there is no loot. So the adventurers need to face the possibility of doing the morally best thing without any material reward.

You could even make it seem that the lizard folks are actually on the right side of the conflict, but the humans won't acknowledge it. So, do the adventurers then side with the lizards? Even if the lizards can't pay?

If you don't have a conflict already planned out, land disputes are really easy to generate even if everyone behaves completely reasonably. If the lizard folk are nomadic and have been out of the area for a while, the town may have been built on or expanded onto some of their traditional land when they were away. The townsfolk may legitimately not know they began encroaching on the lizards folk lands.

The lizard folk might then have valid reasons to not sell the land. Perhaps the land is sacred, or they have taboos against building any permenant strutures at all that the town now violates. Or they might just be trying to charge a price much too high from the townsfolks perspective. The townsfolk would refuse to move because they have invested a lot in their current locations, and besides they felt justified. Their laws may not recognize that kind of nomadic land ownership the way the lizardfolk do.

In that scenario, no one is evil, and at least from their own perspective, no one is wrong.

Have the lizardfolk help them

So, if that is too blunt for you, then I'm going to agree with Flamma and Joe on their techniques to show them to be good.

But you could go further. You could have the heroes get attacked by some obvious evil, and a group of lizardfolk adventurers leap in on the battle On the side of the adventurers.

You don't even need the adventurers to be in real trouble, they could well be winning, but they still see the lizards actively helping them, fighting something obviously evil, perhaps even making calls of friendship (or at least temporary alliance) to the adventurers during the fight. They then have the choice of attacking the lizardfolk anyway or of talking to them on friendly terms.